The average rate on short-term fixed-rate accounts has hit its highest since August 2011, according to new Moneyfacts research.
The average rate paid on one-year fixed-rate savings accounts is rising and now pays 2.85% AER. At the same time, the number of accounts available to savers has also increased from 80 accounts available six months ago to 101 accounts today.
The top-paying one-year deal from BM Savings is currently paying an impressive 3.5% on balances of £1 and can be operated via the internet or by post.
Better rates on your savings
Which? savings expert Jo Langenhan comments: ‘This is a welcome boost for savers as they can now earn higher interest rates on short-term savings accounts and have more to choose from.
‘Before switching, make sure you are happy to tie your money up for the duration of the fixed term, as withdrawals or early closure will be subject to a penalty loss of interest.
‘If you have existing savings accounts, it’s worth checking the interest rate you’re currently getting by using the Which? savings rate booster tool.’