The top fixed bond rates have all dropped over the past six months, according to fresh data from Moneyfacts.
The expected drops came as the Bank of England cut the base rate.
The data showed of the top fixed bond rates, the top one-year bond saw the smallest drop in six months this August, compared with others
Data also showed the gap between one and five-year fixed bonds was narrowing.
|
Feb-23 |
Aug-23 |
Feb-24 |
Aug-24 |
Feb-25 |
Jul-25 |
Aug-25 |
|
|---|---|---|---|---|---|---|---|
| Top one-year fixed bond rate | 4.16% | 6.05% | 5.16% | 5.40% | 4.77% | 4.55% | 4.50% |
| Top two-year fixed bond rate | 4.45% | 6.10% | 5.10% | 5.13% | 4.70% | 4.45% | 4.44% |
| Top three-year fixed bond rate | 4.45% | 6.00% | 4.61% | 4.85% | 4.63% | 4.45% | 4.44% |
| Top four-year fixed bond rate | 4.53% | 5.85% | 4.54% | 4.54% | 4.54% | 4.54% | 4.54% |
| Top five-year fixed bond rate | 4.63% | 5.80% | 4.64% | 4.95% | 4.80% | 4.64% | 4.64% |
The average one-year fixed bond rate at 4 per cent gross is now 0.10 per cent higher than the average five-year fixed bond at 3.91% per cent.
The rate gap was 0.13 per cent in the previous month.
Caitlyn Eastell, spokesperson at Moneyfactscompare.co.uk, said: “Over the past six months the top fixed bond rates have dropped by as much as 0.27 per cent, but this is unsurprising given that there have been a few base rate cuts this year.
“However, month-on-month the top one-year bond has seen the smallest drop in six months.
“This week’s base rate decision was on a knife-edge, the Bank of England’s Monetary Policy Committee had many things to consider.”
Eastell said while it is more likely a cut will have a more immediate impact on variable rates, it is not unheard of for providers to also factor this into their fixed rate pricing.
“Swap rates are heading back down to their 30-day lows, suggesting providers were already primed for a rate cut,” she said.
Eastell urged those with bonds to consider other options, with a range of rates on offer.
In 2024, the lowest one-year bond offered by a big bank was 3.93 per cent, while the market leader was 5 per cent.
Eastell said this meant savers could have lost out on almost £150.
She added: “The Moneyfacts Average Savings Rate currently sits around 3.50 per cent, which is a good ballpark figure to ensure savers do not miss out on the next attractive deal once their current bond matures.
“However, while inflation remains sticky investors may not immediately see any real term returns, so choosing from the 600 fixed bonds that outpace inflation could be a more sensible decision.”
tara.o’connor@ft.com
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