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Rhiannon Philps

Content Writer
Published: 20/01/2025
savings jar full of coins

Savers need to act fast if they want to secure a top savings rate in 2025.

 

The average shelf-life of a fixed rate bond plunged to 33 days at the start of the year, compared to 57 days in the previous month. This is the largest monthly drop in more than four years, according to data from the Moneyfacts UK Savings Trends Treasury Report.

Savings providers have been keeping a close eye on the market and the wider economy to ensure their rates are set correctly, and this has resulted in a lot of activity as they withdraw and reprice their deals.

Because providers can cut rates or amend their product range at short notice, savers shouldn’t delay if they want to secure a competitive account.

This is particularly crucial as experts think December’s lower-than-expected inflation figures make it more likely that the Bank of England will cut the base rate in February, which could cause savings rates to drop further.

Fixed rates hold firm

Average rates on fixed savings accounts saw little movement between December and January, with the average one-year bond remaining at 4.18%.

Meanwhile, the average rate on fixed bonds with terms over 550 days increased slightly from 3.90% in December to 3.91% in January.

This means the gap between the average one-year bond and longer-term bond now stands at 0.27%, its smallest margin since September 2023.

“Savers may be concerned about the expectations for interest rates to come down this year, so a longer-term fixed bond could become more desirable,” Rachel Springall, Finance Expert at Moneyfacts, noted.

“However, their popularity hinges on whether savers hunting for a guaranteed return feel content to lock their cash away for longer,” she added.

Whether savers opt for a shorter- or longer-term fixed bond, a guaranteed rate will be appealing as variable rates continue to drop significantly.

For example, the average easy access rate fell from 2.95% to 2.89% between the start of December and the start of January, while the average notice savings rate dropped from 4.09% to 3.99% over the same period.

But, even though savings rates are trending down, with the average one-year bond falling by 0.47 percentage points over the past six months alone, it’s still worth being proactive about reviewing your savings so you can maximise the return on your money.

Compare savings accounts

Our savings charts are updated throughout the day so you can see the latest easy access, fixed and notice savings rates.

ISA market hots up

Although average easy access ISA rates plummeted from 3.15% to 3.03% throughout December, the leading easy access ISA rate has increased since the start of 2025 thanks to fierce competition between providers.

Moneybox, Plum and Trading 212 all now pay in excess of 5.00% AER on their easy access ISAs, with Trading 212 paying the leading rate of 5.10% AER (terms apply). See our easy access ISA chart for more information on these accounts.

Alternatively, savers who prefer to lock in a guaranteed rate will be pleased to see average rates on one-year and longer-term fixed ISAs edge higher by 0.01 percentage points between December and January to 4.07% and 3.90% respectively.

“Providers will likely make efforts to entice savers with newly priced fixed rate ISAs in the weeks ahead, but the peak of such a rate war would typically be seen in March, and early April at the start of the tax-year,” Springall explained.

She adds that some savers may wait before locking in a fixed ISA to see if rates increase as we approach the new tax-year. However, this comes with the risk that, if rates don’t rise, waiting could mean you miss out on some competitive rates that are available now.

Compare ISAs

See the latest ISA rates available and compare accounts on our regularly updated ISA charts.

Alternatively, our ISA roundup highlights the top easy access, fixed and notice ISAs each week.

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.