Top Fixed Rates Endure Cuts As Variable Rates Flourish - Have You Switch Your Savings Yet

17th July 2024

As rates continue to drop, savers should secure a fixed deal to beat inflation for longer. Moneyfactscompare.co.uk reveals the top rate deals available to those searching for a competitive return.

The Consumer Price Index (CPI) remained at 2.0% during June, from 2.0% in May.

Are you helping bank profits by doing nothing to shift your savings accounts to better rates. Billions of pounds are languishing in the wrong low interest accounts.

There are currently 1,638 savings accounts that beat inflation* (284 easy access, 164 notice accounts, 216 variable rate ISAs, 310 fixed rate ISAs and 664 fixed rate bonds).

The Bank of England's modal projection rate for inflation during Q2 2025 is 2.6%.

In July 2023, there were no deals that could beat 7.9% (June 2023 CPI) and in July 2022, there were no deals that could beat 9.4% (June 2022 CPI).

Caitlyn Eastell, Spokesperson at Moneyfactscompare.co.uk, said, "As inflation continues to soften its burden on savers' pots, they may find that they can earn more cash in real terms, especially with recent fluctuations in the top rates offered. However, those investing in the longer-term will find that rates have remained steady. Both variable rate and fixed rate ISAs have seen an increase in average rates, whereas non ISA savings have seen a mixture of rises and falls across the board.

"Many flexible accounts have soared in the past year, largely due to the several consecutive base rate rises throughout 2023 and fairer competition championed by the FCA, which may be positive news for those less inclined to lock away their cash. However, with an imminent reduction to interest rates expected, savers should anticipate similar cuts to easy access and notice rates. It is crucial that when the time comes savers are willing to switch when more enticing deals enter the market. Fixed rates are continuing to drop and are significantly lower than they were a year ago; savers who are about to have their one-year fix expire can now expect to receive almost 1% less interest compared to the market-leader in July 2023. Despite this, savers should still make the most of current top rates as appetite to secure longer-term deals picks up and to keep on top of inflation and base rate for longer.

“Within the ISA market the top fixed rates have been volatile. Two- and three-year fixes have benefited the most with new market-leading rates, which may be positive news to those looking to make the most out of their ISA allowances for longer. But if consumers are comfortable with the risk associated with a variable rate then there are still a handful of competitive deals available paying around 5%. It is possible that a new Government may well decide to change existing tax savings allowances or policies, savers with bigger pots could see a cap put onto the amount that can be earnt tax-free. Many may be hopeful for the ISA allowance to rise from £20,000 as this has been unchanged for years, however, these changes are yet to be seen.

“It is as crucial as ever that savers keep monitoring their savings to ensure that they are being rewarded. In any case, savers should consider any relevant criteria to ensure the account is suitable for their needs."