A host of banks and building societies have removed products from the savings market.
There’s also nearly £2tn currently held in savings accounts. It’s therefore crucial for everyone to make sure they’re squeezing as much out of their cash as they can.
What does it mean for savings rates?
This rate retreat is particularly focused on fixed-term products at the top end of the market. And is a result of the withdrawal of NS&I’s 1 year fixed rate of 6.2% – the highest ever rate for its savings bond.
The river of cash flowing into NS&I has now been diverted to the next best products in the market.
Because a lot of those rates are provided by smaller banks, with smaller capacities, the best rates are disappearing fast.
For longer fixed terms, we saw the most exciting deals some time ago. With the last three-year fix over 6% disappearing in August.
The days of ever-rising fixed rates might be behind us. If we’re looking down the mountain from this point, it could be a good idea to snap up the better deals before they’re gone.
Remember, fixed rates normally don’t let you take out your savings until after the term ends. It’s a good idea to make sure you’ve already built up an emergency savings pot you can get to quickly before fixing other savings.
What about easy access rates?
So far, the easy and instant-access market has been relatively unaffected by the withdrawal of the NS&I bond.
The rates are more heavily influenced by the base interest rate (currently paused at a 15-year high), and top rates have pushed comfortably above 5% as a result.
With expectations that the base rate will stay high for the foreseeable future, it means we’re not expecting variable rates to drop significantly any time soon.
However, inflation is reducing the spending power of our money as savings rates are below the level of rising prices. So, it’s important to shop around to get a better deal. Especially considering the gap between the top and bottom rate is more than 4%.
Break bad savings habits
There’s a big NS&I shaped hole in the savings market right now, and it’s the smaller bank and building societies who are filling it.
Whatever type of savings account you’re looking for, it’s important to look beyond big high street banks.
By relying on customer inertia, big high street banks can get away with offering lower rates to their customers. Smaller banks, on the other hand, compete hard for your cash. Offering better rates and a greater variety of terms than the big banks.
Active Savings is partnered with a wealth of challenger banks and building societies, offering consistently competitive rates. From short to long-term fixes, as well as easy and limited-access products. All accessible through one online account.
It lets you pick and mix different products so you can get more for your cash, with less shopping around.
New rates are added and removed all the time, so check our website for the latest.
The best rates on Active Savings
Easy access
Up to
4.75% | 4.65%
(AER | Gross)
Avg. market rate
2.73%
1 year
Up to
5.10% | 5.10%
(AER | Gross)
Avg. market rate
5.43%
2 years
Up to
5.05% | 5.05%
(AER | Gross)
Avg. market rate
5.49%
3 years
Up to
4.65% | 4.65%
(AER | Gross)
Avg. market rate
5.21%
Easy access
Up to
4.75% | 4.65%
(AER | Gross)
Avg. market rate
2.73%
1 year
Up to
5.10% | 5.10%
(AER | Gross)
Avg. market rate
5.43%
3 years
Up to
4.65% | 4.65%
(AER | Gross)
Avg. market rate
5.21%
Please note the products above are some of our most popular, but more are available. Click the link above to see our full range. Products can be added or withdrawn at any time. Minimum deposit requirements apply to individual products. Easy access products pay a variable rate and fixed term products pay a fixed rate.
Source for market average rate: Bank of England 31 October 2023. Comparisons with average market rates for easy access products are based on instant access products, which allow immediate withdrawals. Active Savings offers easy access products and withdrawals usually take one working day.
AER (Annual Equivalent Rate) shows what the interest rate/expected profit rate would be if it was paid and compounded once each year. It helps you compare the rates on different savings products. Once you have opened a fixed term product the rate won't change, but rates on easy access products can vary.
Gross means the rate without any tax removed. Interest/profits are paid gross. You are responsible for paying any tax due on interest/profits that exceed your Personal Savings Allowance to HM Revenue & Customs. Tax treatment can change.
The savings of private individuals held with authorised banks and building societies are covered under FSCS. All of our partner banks are authorised by the Prudential Regulation Authority (PRA) and covered under FSCS.
This website is issued by Hargreaves Lansdown Asset Management Limited (company number 1896481), which is authorised and regulated by the Financial Conduct Authority with firm reference 115248.
The Active Savings service is provided by Hargreaves Lansdown Savings Limited (company number 8355960). Hargreaves Lansdown Savings Limited is authorised and regulated by the Financial Conduct Authority (firm reference number 915119). Hargreaves Lansdown Savings Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 with firm reference 901007 for the issuing of electronic money. Hargreaves Lansdown Asset Management Limited and Hargreaves Lansdown Savings Limited are subsidiaries of Hargreaves Lansdown plc (company number 2122142).
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