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Fixed-rate savings deals hit two-year high

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Interest rates on fixed savings accounts have reached a two-year high, according to analysis from independent data site Savings Champion.

A flurry of launches in the last week means all fixed-rate bond and fixed-rate cash ISA averages increased last week, with averages better now than six months ago across the board.

The highest percentage increase was the one-year fixed-rate cash ISA average, which has jumped by 13% from six months ago from 1.06% to 1.20%.

The average one-year fixed-rate bond has gone up by 10% from 1.12% to 1.24% and the variable rate cash ISA average has also gone up by around 10% from 0.69% six month ago to 0.76%.

This comes as the latest figures from the Office for National Statistics show Brits are saving less.

The household savings ratio – the amount of disposable income people are saving – has fallen by 0.4% to 4.1% for the first quarter of 2018, down from 4.5% in the previous quarter.

Anna Bowes of Savings Champion, said: “Although there are still some barriers to entry for savers, the record low rates that we’ve seen in recent years won’t have helped. But the tables are turning, and rates are on the rise, so hopefully this will encourage more people to get back into the savings habit.”

The best buy one-year bond comes from Atom Bank, paying 2.05% or you can get 1.52% from Charter Savings Bank for an ISA version.

The top-paying three-year account is from Masthaven, paying 2.32% or 1.85% for the ISA version from Shawbrook Bank.

The best five-year bond is from Secure Trust Bank and pays 2.67% or 2.31% from Charter Savings Bank for the ISA version.

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