Since the base rate steadied there are now no fixed bond rate accounts priced at 6% AER on the market, but a finance analyst believes savers shouldn’t be too disheartened.
The final provider to offer a rate above 6% was Union Bank of India (UK) but last week it dropped that market-leading rate and JN Union Bank took its place at the top of the savings charts.
It moved ahead of the provider, offering 5.90% AER on a three-year fixed term account.
Rates on fixed bond accounts skyrocketed up to 6% following the Bank of England’s fourteen consecutive months of base rate increases, starting from December 2021. Since the Monetary Policy Committee (MPC) voted to hold the rate at 5.25% for the second successive month in November, savers have seen a dip in the market-leading prices.
Finance analyst Moneyfactscompare.co.uk believes it’s unlikely the days of paying 6.00% AER on a fixed bond account will return in the ‘immediate future’, but stopped short of saying it is an impossibility.
‘Good news is variable savings rates have improved’
Rachel Springall, finance expert at Moneyfacts, said: “The good news is that variable savings rates have improved over the same period, largely down to base rate rises slowly trickling through the market and provider competition.
“There will still be a case for challenger banks to change their offerings in line with their own funding targets, regardless of base rate changes.”
Meanwhile, UK banks might be heading into battle to win over customers if rumoured new rule changes are announced in the Autumn Statement on 22 November.
Sources say savers and investors may soon be able to shift their funds to better Individual Savings Accounts (ISAs) more easily, as restrictions on the number of accounts held could be lifted.
Chancellor Jeremy Hunt reportedly hopes this will lead to more competitive rates for savers and better opportunities for them to build up a bigger pot in tax-free interest every year.
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