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Ella Mower

Senior Content Writer
Published: 20/10/2023
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This is the first time average rates have fallen in this sector since March 2023.

The average rate paid by a fixed bond with a term over 550 days dropped to 5.11% at the start of October, according to Moneyfacts’ data. This is the first time this rate has fallen since March 2023.


It’s a similar story when it comes to longer-term fixed ISAs. While average returns in this corner of the market didn’t drop at the start of the month, there was no improvement either, with the average rate remaining unchanged at 5.02%.


“One area of the market not blessed by rate rises this month is longer-term fixed bonds,” said Rachel Springall, Finance Expert at Moneyfactscompare.co.uk.


This signals “a turnaround for the longer-term fixed rate market”, Springall went on to add, brought about by a pause in the Bank of England base rate and the markets expecting rates to drop in the coming months.

Why do average rates matter?

Average rates can give an idea of whether you’re getting competitive returns on your savings. Not only this, but they can provide an overview of how the market is performing. If average rates are falling, it may be time to review your savings. Our dedicated savings and ISA charts offer whole of market data, helping you to make informed decisions.

Is now a bad time to open a longer-term fixed bond?

While the average rate for a longer-term fixed bond fell at the start of October, it’s important to note this was only a slight drop down from 5.12% the previous month.

It’s still possible to find rates of around 6.00% AER offered by longer-term bonds if you’re willing to consider challenger banks. For instance, Union Bank of India (UK) Ltd pays 6.05% AER with its two-year Fixed Rate Deposit and Union Premier Bond. Meanwhile, the three-year and five-year Fixed Term Savings Accounts from JN Bank offer 5.97% AER and 5.80% AER respectively.

If you’re considering investing in a longer-term fixed bond or ISA, the recent fall in average rates means you may need to act quickly to take advantage of some of the highest rates.

Compare the best savings rates

For more information on the best savings rates available, read our weekly savings roundup. Alternatively, visit our charts for a wider view of the market as a whole.

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Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfactscompare.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

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Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.