You are here: Home - Saving & Banking - News -

Rates slashed on ‘final solution’ savings products

Written by:
Struggling savers have been dealt another setback with news that rates on long-term fixed bonds have plummeted to record lows.

These products were once the premier solution for many savers looking for a decent return.

However, the average five-year fixed bond rate has sunk to 1.69%, according to data site Five years ago, savers would have been able to get a rate close to 5%.

Charlotte Nelson, finance expert at Moneyfacts, said: “This will hit savers used to using their long-term savings to supplement their income hard, particularly as the average rate has fallen by 0.96% in just one year.”

The number of providers offering these bonds has also dropped to 27 from 31 a year ago, meaning both poor choice for customers as well as meagre rates.

Only two providers – Secure Trust Bank and Milestone Savings – offer 2% or more over a five-year fixed term.

“The low interest rate environment looks like it is here to stay for some time, and providers simply do not want to be caught out paying higher rates than may be necessary in the future,” said Nelson.

Despite the widespread cuts, long-term fixed rates still offer some of the relatively better rates.

“Savers will therefore have to weigh up the benefits of these compared to a shorter-term offer while doing their best to weather the current unpredictable environment,” Nelson added.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Philip Hammond Chancellor
Chancellor considers dropping Autumn Statement

Chancellor Philip Hammond is considering axing the Autumn Statement, scaling back the role of the Treasury and reprioritising its tax...