Savers are being urged to shop around and move fast if they want to get hold of one of the competitive deals still available. These include one-year fixed-rate savings bonds paying up to 4.35% and an easy-access account with a rate of 4.5%.
The impact of the Bank of England’s pre-Christmas interest rate cut – the sixth reduction since August 2024 – has been making itself felt, with reductions to rates on many savings accounts. But some best-buy savings rates have arguably held up better than one might have expected.
“January is the ideal time for savers to set new financial goals and check if their savings are working as hard as they can,” says Caitlyn Eastell at the financial data provider Moneyfacts.
The news this week that UK inflation rose by slightly more than expected in December has pros and cons for savers. It prompted many experts to all but rule out another interest rate cut when the Bank of England’s rate-setting committee next meets on 5 February. If the next interest rate cut is pushed back, that could slow the pace at which top savings rates disappear. But the tradeoff is that higher inflation erodes the real value of the returns that savers receive, says Alice Haine at the investment platform Bestinvest.
This week there were more than 1,400 savings accounts offering rates that beat inflation, about half of which were fixed-rate bonds.
A fixed-rate bond is a product that can offer people “peace of mind” by allowing them to lock in at today’s rates before they fall, says Harriet Guevara at Nottingham building society.
However, you need to move quickly to grab the best offers: on Wednesday this week, the top rate on a one-year fixed-rate bond was the 4.55% offered by Marcus, a banking brand operated by Goldman Sachs. But by Thursday morning that deal had been withdrawn after MoneySavingExpert founder Martin Lewis highlighted it, resulting in a flood of applications. “It is crucial that savers are fast to react to attractive deals, otherwise they face missing out,” says Eastell.
At the time of writing, the top-paying one-year fixed-rate bond was an account paying 4.35% on £1,000-plus offered by the savings and investment brand Meteor in conjunction with OakNorth Bank. Other best-buy one-year fixed-rate bonds included one from Shawbrook Bank paying 4.27%, and another from OakNorth Bank offering 4.23%.
Some savers may prefer to lock their money away for two years, on the basis that they will then be protected from any future rate cuts for longer. This week there were plenty of two-year bonds from the likes of Shawbrook Bank, Investec and Atom Bank paying more than 4.1%. Keep a close eye on the best-buy tables at Moneyfactscompare.co.uk. For those who want to get their hands on their money, there are a number of easy-access savings accounts paying more than 4%.
Chase (the UK retail arm of the US bank JP Morgan) has one available to new banking customers called Chase Saver that pays 4.5%, although that rate is boosted by a 2.25% bonus that lasts for 12 months (the account’s standard rate is 2.25%). That rate is available during the first 31 days of being a new Chase current account customer.
Haine says: “Those hoping to preserve returns on cash held in bank and building society savings would be wise to seek out the most competitive deals sooner rather than later.”