Top fixed rates fall but switching is still crucial for savers

A recent Moneyfacts survey revealed that one in four people have never switched savings accounts.

Even though the leading fixed savings rates continued to fall throughout September and into October, savers are still urged to switch to ensure they’re getting a return on their money.

The top one-year bond fell from 4.50% at the start of September to 4.45% at the start of October, while the leading two-year bond saw an even larger drop from 4.50% to 4.43% over the same period, the latest savings update from Moneyfactscompare.co.uk reveals.

Even though these rates are now significantly lower than two years ago when savers could secure interest in excess of 6.00%, the leading accounts still offer inflation-beating returns.

“Inflation remains a significant burden which makes it harder for savings to generate real returns,” Caitlyn Eastell, Spokesperson at Moneyfactscompare.co.uk, pointed out.

“It’s crucial that savers are proactively searching for the most competitive deals, especially if they pay below 3.8% [August’s inflation rate],” she urged.

Why are savings interest rates falling in the UK?

Savings rates, including fixed rates, have been gradually falling over the past couple of years. This is largely because the Bank of England has been lowering the base rate since August 2024, which has prompted providers to cut interest rates accordingly. See more on how the base rate affects savings.

The cost of loyalty

Any money in a savings account paying interest below inflation is losing value in real terms.

And it’s those who aren’t proactively reviewing the savings market and switching to competitive accounts that are likely to be more at risk of earning paltry returns on their money.

Worryingly, one in four people have never switched savings accounts, according to a recent Moneyfacts survey.

This could be because savers prefer to stay loyal to a particular provider and keep their money with a high street bank, for example, or simply because they don’t think it’s worth switching to an account with a higher rate.

However, Eastell notes that “savers could be missing out on a significant cash bonus” if they’re not “more aware about where they put their money”.

She also added that “savers should keep an open mind when choosing a provider” as it may be less-familiar brands that offer the best rates. But, even though the providers at the top of our charts may not necessarily be household names, they offer the same protection under the Financial Services Compensation Scheme (FSCS) as the major banks.

Find the latest savings rates

See which providers currently offer the top rates, and find out more details about each account, by visiting our savings charts.

Research shows reluctance to lock away money for longer

Long-term bonds have performed better over the past year than their shorter-term equivalents, as the average five-year fixed rate increased from 3.81% in October 2024 to 3.96% in October 2025.

Moreover, the top five-year bond offered 4.64% at the start of October, the same as one year ago.

With longer-term bonds offering more competitive interest rates, many savers may prefer to lock their money away for several years to ensure they receive a guaranteed return, and to protect their savings against any further drops in rates.

However, some savers understandably feel uneasy about not being able to access their savings for this length of time.

Indeed, “more than one in four women are missing out on top savings returns because they aren’t confident enough in their finances to lock it away in a fixed term account – compared to just one in seven men,” Eastell commented.

Savers may be concerned about being able to cover an unexpected expense if they lock their money away in a fixed bond, which is why it’s important to have an emergency fund in an easy access account that you can withdraw from when needed.

But, for those who have sufficient money saved to cover any unforeseen costs, a fixed bond is worth considering to maximise the return on your savings.

Compare fixed bonds

Whether you want to lock away your money for a few months, one year or five years, see the best rates currently available on our fixed bond chart.