Yahoo Finance Time running out for savers as top rates start to fall
Top savings deals are disappearing from the market as interest rates on bonds crash to a three-month low.
Eight banks have lowered returns on their fixed-rate bonds in the last two weeks, according to Savings Champion, an analyst.
Savers are being urged to grab the most lucrative deals now before they are withdrawn by banks and replaced with lower rates.
Fixed-rate bond rates surged in the wake of the mini-Budget because they were influenced by market predictions that the base rate could hit 6pc.
Since Jeremy Hunt became Chancellor in October and scrapped most of the plans, market expectations have dropped, pushing down returns on savings bonds.
The highest rate for a one-year bond has dropped from 4.75pc in October to 4.33pc, while for five-year deals it is down from 5.1pc in November to 4.45pc.
The top three-year rate has slumped to 4.55pc, from 5pc in November, and the highest two-year rate fell from 5pc to 4.5pc during the same period.
Anna Bowes, of Savings Champion, said future rises in the bank rate are expected and already being priced into the fixed-term bond rates being offered by banks, so returns are unlikely to go up.
She said: “It looks as though we’ve passed the peak in savings rates. If you see a rate that is of interest you might want to move as quickly as possible in case it’s withdrawn.”
Rates on easy access and notice accounts are more closely tied to the current Bank Rate and are therefore likely to keep increasing.
Banks that have reintroduced bonds at a lower rate in the past two weeks include Ford Money: its five-year bond is down 0.4 percentage points, from 4.95pc to 4.55pc.
BLME’s seven-year bond now pays 4pc, compared with 4.5pc previously.
Aldermore, Zopa, Union Bank of India, Smart Save, Investec and Gatehouse are the other providers who have taken this recent step.
