Over the past few years savers have had little to be cheerful about; however, research form Moneyfacts.co.uk can reveal that the savings market is once again showing signs of life.

Now that new banks are stepping onto the scene and competing for savers’ cash, Moneyfacts.co.uk has seen rates for one-year fixed rate bonds increase for one of the first times since the Funding for Lending scheme was introduced.

Charlotte Nelson, Finance Expert at Moneyfacts.co.uk, said:

“It’s great news that we are finally seeing a rate movement that will make savers smile. The increase of the one-year fixed rate bond average from 1.41% a year ago to 1.47% today is very positive and is the first time in a long while that we have seen rates increase for two consecutive months*.

“July finally seems to have seen the end of the rate-cutting trend, with more providers increasing rates on their one-year fixed rate bonds than decreasing them.

“This is due to fierce competition between challenger banks, which are trying to dominate this sector. As many of these brands are unknown, they have little to compete on apart from price, causing many of them to constantly fight for a market-leading position. In fact, all of the top five one-year fixed rate bonds on the market today are from non-mainstream banks.

“With a base rate rise looming, savers will be reluctant to tie up their money for longer than a year, so a one-year fixed rate bond could be the perfect option for those who don’t want to miss out on the opportunity to secure better rates in the future.

“The competition between these challenger banks will hopefully continue, keeping rates rising and spurring the main banks into offering better returns. However, savers know all too well that rates can fall just as quickly as they rise, so they shouldn’t wait too long to secure a great one-year fixed rate deal.”

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.