The leading top one-year fix priced at 5.25% gross is 0.30% higher than the five-year equivalent at 4.95%, Moneyfacts’ data finds.
Savers shopping around can enjoy an average one-year fixed bond at 4.64% – 0.66% higher than the five-year bond at 3.98%.
Indeed, the leading two-year fixed bond for July is 5.13%, a rise from 4.96% in the previous month.
Across the fixed bonds landscape for longer-term deals, rates have largely dipped since June, while the three-year option has stagnated at 4.85%.
The top four-year rate fell from 4.75% to 4.60%, however, this is still a huge rise from two years ago when the best rate on the market was 1.92%.
At a time of fluctuating rates for fixed bonds, Rachel Springall says the best rates for savers are still being offered by challenger banks.
‘Short-term fixed rate bonds in ‘an interesting space’
Springall said: “Such competition and brand variety makes it an interesting space for consumers comparing deals, but this also means savers need to be quick off the mark to secure a top rate before institutions meet their deposit targets.
“However, just because the top rates move, does not necessarily mean the whole market is moving in a similar trajectory, so savers need to compare deals carefully.
“Since the start of 2024, the top fixed bond rates have come down, and are significantly lower than they were a year ago, but this should not deter savers from taking advantage of the rates currently available.
While the base rate may have stayed at 5.25% at the end of June, a cut later in the year is widely anticipated, which will send the rates on fixed bonds southwards.
With that in mind and despite the gap in rates between bond terms, Springall believes securing a longer-term deal now “may be wise”.
She added: “There may be more appetite to secure a longer-term deal now than at the start of the year when the top five-year bond paid 0.75% less than the top one-year bond”
“Fixed rate bonds are an ideal choice for savers looking for a guaranteed return on their investment, whether that be for a year or more. However, not every saver may be prepared to lock away their cash over the longer term. It will be interesting to see how rates will fluctuate in the coming months.”
