Lock in top savings deals as rates start to fall

Time is running out for savers to lock in the highest rates as long-term deals fall after six months of rises.

While variable rates on easy-access, notice and Isa accounts rose for the 20th consecutive month in September, longer term fixed-rate bonds fell for the first time since March, according to financial analysts Moneyfacts.

Longer term fixed-rate bonds fell to 5.11pc from 5.12pc. While a small decrease, it marks the first time longterm savings deals have fallen since spring, with experts warning of a turning tide and urging savers to lock in peak rates now. They reiterated previous warnings that rates of 6pc or more could soon disappear from the market.

National Savings and Investments pulled its 6.2pc one-year bond from the market this month. It was the best savings deal on the market and the best rate it had paid since 2008.

The move came ahead of the latest inflation data from the Office for National Statistics, which showed inflation in September was unchanged at 6.7pc. Inflation had been expected to dip slightly and its stubbornness will influence the Bank of England’s call on interest rates next month. On Sept 21, the Bank paused its cycle of rate rises, which began in December 2021, putting the Bank Rate at 5.25pc.

Rachel Springall, of Moneyfacts, said: “One area of the market not blessed by rate rises this month is longer-term fixed bonds, with the average rate falling for the first time since March, while the average longer-term fixed Isa rate stood still.

“This signals a turnaround for the longer-term fixed-rate market, perhaps not too unexpected with base rate remaining on hold and the markets expecting rates to drop in the months ahead.”

Sarah Coles, of broker Hargreaves Lansdown, said the changes showed the market had passed its peak.

She said: “There’s every sign that we are past the peak. I don’t think it will be long before we stop seeing those 6pc rates in the fixed-rate market.

“This is one of the first weeks that we’ve seen nobody raising rates. We’ve seen loads of people cut rates, and we haven’t seen people raise rates. It’s looking like the tide has turned.”

James Blower, of website Savings Guru, said it was likely to be the end of accounts paying more than 6pc.

He said: “We don’t expect savings rates to crash, but fixed rates are likely to fall back gently from here and easy-access rates are unlikely to go much higher, even if the Bank Rate goes to 5.50pc on Nov 2.”

On five- year bonds, JN Bank is offering 5.8pc, while Cynergy and Tandem, via the Raisin savings platform, both pay 5.65pc. A top rate of 5.97pc is available on three- year bonds, whereas savers can still achieve more than 6pc with the Union Bank of India on one and two-year bonds.