Savers handed September boost as fixed rates soar

Longer-term fixed savings rates are now at their highest level in over two years.

Fixed savings and ISA rates continued to climb over the summer, giving savers the opportunity to lock in a competitive rate for several months or several years.

For those who want to secure a guaranteed return for 12 months, the average one-year fixed savings rate rose from 4.23% to 4.28% between the start of August and the start of September, data from the latest Moneyfacts UK Savings Trends Treasury Report revealed. This is the highest this figure has been since October 2024.

While the average one-year ISA rate recorded a smaller rise of 0.02 percentage points, it still reached a two-year high of 4.26% in September.

Elsewhere, the typical rates on longer-term bonds and ISAs increased to 4.31% and 4.30%, respectively, in the month to September. The last time these rates were higher was back in January 2024.

“Savers have been handed another welcome boost this month, with fixed savings rates continuing to climb and competition remaining incredibly strong across the market. The average one-year fixed rate has now risen for six consecutive months, while longer-term fixed rates rose for a seventh month,” Caitlyn Eastell, Personal Finance Analyst at Moneyfactscompare.co.uk, noted.

By contrast, the average easy access ISA rate dropped to 2.71% while the average easy access savings rate remained at 2.53% for the third month running.

Billions in fixed savings set to mature

This upwards trend in the fixed savings and fixed ISA markets is likely to be particularly encouraging for savers who already have fixed accounts that are due to end (or mature) over the coming weeks.

Indeed, around £35.7 billion in ISA and non-ISA accounts is expected to mature in September, according to analysis of CACI data by Skipton BS.

Some of these accounts may have been opened in the autumn of 2023, when average fixed rates rose above 5%. Even though current savings rates are not at this level, proactive savers can ensure they continue to get an attractive return on their money by moving their matured savings to a new account.

If savers don’t move their money when a fixed term ends, the provider may automatically put it into a low-paying variable account which could see individuals miss out on a significant return.

“It is essential that savers prepare to move any money before their fixed rate is due to expire if they have not already given their instructions when opening an account,” Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, urged.

Even if they don’t want to lock away their savings in another fixed account, savers can still earn a substantial amount of interest by putting their money in a competitive easy access account.

Will fixed rates carry on rising?

Many savings providers have continued to increase rates on their fixed bonds and ISAs in September, with the leading three-year and five-year fixed savings accounts now paying 5.02% AER and 5.03% AER, respectively, thanks to GB Bank.

Meanwhile, for those wanting to secure a tax-free return on their savings, Tandem Bank is now offering 4.93% AER on its five-year Fixed Rate Cash ISA.

“This continued upward movement is positive news for savers who are looking to secure a guaranteed return, particularly those who have been waiting to see if rates could climb even higher,” Eastell commented.

Furthermore, savers wanting to switch accounts now have a record number of options to choose from, with the number of savings accounts (including ISAs) rising to a record high of 2,642 at the start of the month.

Although there’s no guarantee how long these accounts and rates will be available, Eastell points out that the average shelf-life on fixed products has jumped from 32 days to 43 days.

This could “give savers more breathing space to compare their options rather than feeling they must rush into a decision,” she explained.

Discover today’s top savings rates

Savings rates can change all the time so, for an up-to-date list of the highest rates currently available, visit our savings charts and ISA charts.

You can also check out our ISA roundup and savings roundup for an overview of the top accounts on offer, and subscribe to our free, weekly Savers Friend newsletter to get the latest changes from the savings market delivered to your inbox.