Data from Moneyfacts shows that average interest rates failed to rise across both one-year and longer-term fixed bonds this month.

Rachel Springall, finance expert at Moneyfacts, said the savings market appears to have “entered a period of stability”, following months of volatility. 

The average one-year fixed bond rate remained unchanged for the first time in a year and the average shelf life of fixed accounts overall rose by two days to 29 days.

During the same period, all average variable rates rose, including variable rate cash ISAs. 

“These movements show the change in attitude among providers in the aftermath of the interest rate uncertainties across the last quarter of 2022,” said Springall, “Across the savings market, the number of accounts paying above base rate fell.”

What are the best paying accounts?

According to the latest Moneyfacts UK Savings Trends Treasury Report all variable rates (easy access, notice and ISA equivalents) rose for the 11th consecutive month.

The average easy access rate rose to 1.56% and stands at its highest point since December 2008 (2.58%).

The highest paying easy access account is Santander Edge which pays 4% on balances up to £4,000 – but you need a Santander Edge current account to be eligible. 

The average one-year fixed bond was unchanged at 3.51% for the first time since January 2022. The best paying account in this category is from Habib Bank Zurich which pays 4.33%.

Time to check your rate

Moneyfacts says that while the savings market overall has been “blessed by interest rate rises during 2022”, almost 70% of accounts now pay below base rate (3.50%). 

The financial analyst said the consecutive rises to base rate should spur savers to check their existing savings accounts, particularly as challenger banks and building societies offer some of the best rates on flexible accounts.

“As a new year begins many of us may be reconsidering our savings habits, particularly as the cost of living crisis continues to bite. The flexibility that comes with easy access and notice accounts make them a suitable option if you need to dip into your savings pot in the short-term,” said Springall.

“But if you’re looking to put your money away for longer to secure a better rate of return, you may need to wait to see if providers adjust their rates to entice new business.”