Interest rates on fixed bonds and ISAs fell in consecutive months for the first time since 2021, according to data.
The average one-year fixed bond fell for the first time since April 2021 to 5.36% and the longer-term fixes dropped to 5.02%.
Meanwhile, the average one-year fixed ISA dropped to 5.20%, with longer-term fixed ISA rates falling to 4.92%. Both account types saw the biggest rate cuts since December and July 2020, respectively.
The number of products available on the market also decreased – down from 1,450 in October to 1,442 in November. This is still over a hundred more account options than what was available in 2022 and around 200 more than at the same time in 2021.
Easy access on the rise
At the other end of the scale, easy access, notice and ISA equivalent accounts rose for the twenty-first month running – the first time since Moneyfacts UK began sharing data from its Savings Trends Treasury Report in 2007.
The average easy access rate also rose to 3.18% – the highest level since it reached 3.63% in November 2008. The average notice rate rose to 4.24% too, coming close to its previous high of 4.37% in December 2007.
‘Fixed savings rates could fall further before year is over’
Rachel Springall, finance expert at Moneyfacts, said: “Fixed bonds and ISA rates have fallen across the board, which will be disappointing news to savers. There was a clear downward trend in the fixed market as all average fixed rates fell for the first time since March 2021. There have been sizeable month-on-month cuts not seen since 2020 and it is the first time that the average one-year fixed bond and ISA rates have fallen in over two years.
“There are expectations for interest rates to drop in the months ahead, so fixed savings rates could fall further before the year is over. However, there are still some providers enhancing their fixed rate savings deals, and challenger banks could go against the trend and increase their rates if they need to entice deposits to fund their future lending.”
Springall added: “To secure the best possible deal, savers will need to act quickly, as providers can control any spikes in demand with subsequent rate cuts and withdrawals. As it stands, providers may well be looking closely at the margins towards the top end of the market and may shift down the top rate tables to better manage cash inflows if their close competitors make significant cuts.”
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