Image of Rhiannon Philps

Rhiannon Philps

Content Writer
Published: 20/02/2024
jar of coins

Despite falling rates, one-year bonds continue to offer better returns than longer fixes.

As fixed savings rates continue their downwards trend, shorter-term fixes now offer savers higher returns than longer-term deals. While the average one-year fixed bond paid 4.62% at the start of February, the average rate on longer-term fixed bonds was notably lower at 4.12%, Moneyfacts data reveals.

Similarly, the average rate on one-year fixed ISAs was 4.51% compared with just 4.08% for longer-term fixed ISAs.

Locking away your savings in fixed accounts for longer periods has traditionally offered better returns, and, as recently as one year ago, longer-term fixes offered a better rate on average than shorter fixes.

However, this currently isn’t the case, as one-year fixes are now outperforming their longer-term equivalents.

Falling fixes

Average rates on one-year fixed bonds and ISAs saw their fourth consecutive monthly fall between January and February, dropping to their lowest level since June and July 2023 respectively.

Meanwhile, average rates on longer-term fixed bonds (defined as those with terms of over 550 days) saw their biggest month-on-month fall since February 2009.

“Savings providers have slashed rates across fixed rate bonds month-on-month, a sentiment which may continue over the next few weeks as they jostle positions in the top rate tables amid volatile swap rates,” commented Rachel Springall, Finance Expert at Moneyfacts.

“The incentive for savers to lock into a longer-term bond may have waned in recent months and this month the average one-year fixed bond rate now returns 0.50% more than the longer-term rate,” she continued.

Despite the rate cuts, average rates are still much higher than one year ago.

Short-term fixed rates have seen a particularly significant annual increase, with average one-year fixed bonds rising from 3.58% to 4.62% and one-year fixed ISAs rising from 3.41% to 4.51%.

Meanwhile, average longer-term fixed bonds have only risen from 3.87% to 4.12% and longer-term ISAs from 3.68% to 4.08%.

Easy access rates buck trend

In contrast to fixed rates that have fallen month-on-month, average rates on easy access accounts have seen a slight increase.

The average easy access savings rate stood at 3.17% at the start of February, up from 3.15% in January.
And easy access ISAs saw an even bigger monthly increase, with the average rate rising from 3.25% to 3.30%. This is just 0.01 percentage point short of its 2023 high.

While easy access rates remain strong, you could still get a better return on your savings if you’re comfortable locking your money away for a fixed period.

Furthermore, because providers can drop the rates on easy access accounts with little warning, you could find your account doesn’t pay as much as expected, especially if the Bank of England drops the base rate this year.

With the number of savings accounts and ISAs rising month-on-month to 1,359 in February, there are plenty of options available if you’re looking to take advantage of current rates.

Compare savings accounts

Our savings charts are regularly updated so you can see the best savings rates available, whether you’re looking for an easy access account, a fixed-rate bond or a notice account. Similarly, you can also use our ISA charts to check out the top easy access and fixed ISA rates.


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. 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. will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by will always be from Be ScamSmart. will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by will always be from Be ScamSmart.