‘Optimistic view’ for savings market as number of deals hits 12-year high

Many average savings and ISA rates also increased month-on-month.

The number of savings products (including ISAs) on the market rose to 2,014 at the start of July, according to the Moneyfacts UK Savings Trends Treasury Report. This marks its highest level since May 2012 and compares to 1,973 products this June.

Cash ISAs also saw a month-on-month rise in deals to 571 accounts, the highest count since Moneyfacts’ electronic records began in 2007.

The number of Cash ISAs on the market has grown by 114 in the past six months alone.

Alongside more deals for consumers to choose from, the number of providers offering savings accounts also increased to 144 in July, another all-time high for Moneyfacts’ records.

Back in 2012, when product choice was last over 2,000, this number was only 116.

“A rise in both product choice and providers can instil an optimistic view for the savings market, particularly if the new participants are eager for deposits to fund their future lending and boost their rates to stand out from their peers,” explained Rachel Springall, Finance Expert at Moneyfactscompare.co.uk.

Is now the time to switch accounts?

Moneyfacts’ data also found that average rates across various sectors rose between June and July.

More choice and higher rates may therefore prompt many to consider whether they’re receiving the most competitive returns on their savings.

Average rates for a one-year fixed bond jumped up significantly from 4.59% to 4.65%, while rates for longer-term term bonds saw a smaller increase from 4.13% to 4.16%.

Short-term bonds have consistently outperformed longer-term accounts since August 2023 when the base rate was last changed.

However, should the Bank of England Monetary Policy Committee (MPC) decide to cut the base rate, longer terms may again become more tempting.

Despite inflation holding at 2%, experts are still undecided about potential changes to interest rates next month.

“As murmurs continue of a cut to the Bank of England base rate in August, variable rate accounts could face cuts,” said Springall.

Some variable sectors are already seeing reductions, with average easy access rates declining to 3.11% between June and July.

As a result, it’s worth reviewing your savings to ensure you’re getting a good rate, and not missing out.