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Rachel Springall

Finance Expert & Press Officer
Published: 20/02/2023
coins in a jar with a plant sprouting out of it

All average variable rates rose for the 12th consecutive month, a first time on Moneyfacts records.

Average variable savings rates, which includes easy access and notice accounts, reached a 14 year high this month, according to Moneyfacts data.

The average easy access and notice rates stand at 1.74% and 2.49% respectively, having increased for the last 12 consecutive months. Both figures were last bettered in December 2008.

This has largely been due to consecutive Bank of England base rate rises, coupled with competition among challenger banks.

Increased competition can also be noted in the increased number of savings accounts. February registered an increase of 32 new savings account  options to a total of 1,727, the biggest month-on-month increase since last March. The number of Cash ISAs is at its highest level since August 2019.

Cash ISA choice improves

There are encouraging signs for the months ahead, particularly as we edge closer to a new tax-year.

Average interest rates offered across both easy access and notice ISAs stand at their highest since 2009, but the margin between the two of 0.72% stands at its highest on record.

A notice ISA may then be an alternative for savers who want a bit of flexibility, but desire a higher rate than may be on offer on an easy access ISA. Those savers who prefer to fix their ISA cash will find the average one-year fixed ISA rate stands at its highest point since January 2009 and is a notable 2.82% higher than that of a year ago.

Why is my Personal Savings Allowance important this tax year?

With rates on the rise it could be easy to breach your Personal Savings Allowance. This is explained in more detail in a recent news article.

Fixed rate deals in demand

Fixed bond rates appear to be in much demand from savers, but at the same time, there are those dipping into their more flexible pots.

This is according to recent figures published by the Bank of England, who recorded an outflow of £1.2 billion from interest-bearing sight deposits in December 2022 and demand for fixed accounts recorded an inflow of almost £7 billion into time deposits.

Our own data shows volatility surrounding fixed bond rates has softened after recent months of uncertainty, with the average shelf life of fixed bonds rising to its highest level since May 2022, up from 29 days to 48 days, the biggest month-on-month rise in more than two years.

As for interest, the average rate on a one year fixed bond followed a similar trajectory to variable savings rates and sits at its highest point since December 2008.

However, when providers review their market positions, a standout top rate that sits way above its nearest competition may not be around for long, particularly if offered by a challenger bank that reaches it funding targets.

Disclaimer

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.

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