Average 5 Year Fixed Interest Rate Savings Bond Falls to 2 Year Low
Personal_Finance / Savings Accounts Aug 10, 2011 - 12:01 PM GMTBy: MoneyFacts
Average savings rates for long-term fixed rate bonds have fallen significantly over recent months. The current average five-year fixed rate is 3.74%, its lowest average for two years.
Louise Holmes, spokesperson for Moneyfacts.co.uk, commented: “A number of providers have reduced and withdrawn their fixed rate savings bonds recently, bringing average rates down. Whilst the short-term market has remained relatively unscathed, long-term bonds which typically pay the higher rates, have been hit particularly hard.”
“Providers appear to be funding their mortgage lending pots via the currently low money markets, rather than through their savings products. Whilst this is potentially good news for borrowers, savers are paying the price by receiving disappointing returns on their investments.”
“This latest fall in average long-term bond rates will do little to help savers who are reluctant to lock their funds away for long periods, for fear of the rate becoming uncompetitive in a volatile market once interest rates increase.”
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