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Fixed-rate savings deals aren’t hanging around

Accounts available for an average of just 37 days

Fixed rate deals

Fixed-rate bonds aren’t around for long

New research from Moneyfacts shows that the average length of time a fixed-rate bond is on the market has fallen to just 37 days.

Since base rates have been at 0.5%, the average length of time fixed-term bonds have hung around for has typically been over 100 days, peaking at 133 days in October 2009.

Even six months ago deals were being kept on offer for 131 days, but the change in the money markets has meant that providers are now withdrawing offers sooner than in the past.

Change in money markets impacts savers

Michelle Slade, spokesperson for Moneyfacts, said of the development: ‘Money market rates are now notably lower than they were a few months ago and it is likely that providers are using this to raise money for their lending rather than through their savings book.

‘Savers are still actively trying to find the best deal, so when market leading deals are launched they are oversubscribed extremely quickly.

‘Only last week a market-leading deal was launched and withdrawn by Yorkshire Building Society (under the Chelsea BS brand) in just three days.

‘If savers want to secure top rates they need to act fast because if they wait too long it’s likely the deal will be gone.’

Savers must act fast

Paul Davies, savings analyst at Which?, added: ‘There has been a clear shift in the tactics used by providers with attractive, fixed-rate deals being offered for a much shorter period than previously.

‘Average fixed-rate bond rates have also started to fall, particularly on five-year bonds, so keep your eyes open for any deals that do offer excellent rates as they may not be around for long.

‘The usual warnings around tying your money up still apply, so don’t rush into a deal just because you think it’s about to disappear – opt for an instant access savings account if that better suits your requirements.’

pound coins

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