Savings rates and cash ISA choice hit ‘highest levels’ in 2023

With successive Bank of England Base Rate rises, savers have been benefiting from increasingly higher returns on their savings. New research from Moneyfacts shows interest rates have been rising “month on month” and providers have been becoming increasingly competitive, a finance expert has said, which is a good sign for savers.

Commenting on data drawn from the last 12 months, Rachel Springall, finance expert at Moneyfacts, said: “The consecutive Bank of England Base Rate rises, coupled with competition among challenger banks, has led to both the average easy access and notice rates hitting their highest levels in more than 14 years.”

Ms Springall noted that the number of accounts on offer for savers has also grown, seeing the biggest month-on-month rise since March 2022 with choice now resting at the “highest count” since November 2022.

She added: “These are all encouraging signs for the months ahead, particularly as we edge closer to a new tax year.”

According to Moneyfacts’ research, the average easy access savings account interest rate rose to 1.74 percent up from 0.17 percent in February 2021, which stands it at its highest point since December 2008 (2.58 percent).

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Ms Springall said: “There was an outflow of £1.2billion from interest-bearing sight deposits in December 2022 and demand for fixed accounts recorded an inflow of almost £7billion 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 (December 2021).”

However, Ms Springall pointed out that standout top rates don’t appear to be available for long, “particularly” if offered by a challenger bank that reaches its funding targets.