After two years in the spotlight, it looks like fixed rates are well and truly on the way down.
From October to December, the average one-year fixed rate fell from 5.45% to 4.89%. In the same time, one-year Cash ISA rates fell from 3.35% to 2.56%.
Longer term fixes had an even bigger fall. With the average rates for a two-year fixed or above falling way below 5% in December.
However, there are still opportunities for a good deal on your cash, if you’re looking in the right place.
This article isn’t personal advice. If you’re not sure if something is right for you, ask for advice.
What can I do about it?
The trend is likely to keep going downwards, if so there’s nothing to gain from waiting. If the decline does continue, savers keen to lock in 5% rates for one year might only have a few more months, or weeks, to do it.
Fixing now means money will keep getting that rate even if others keep falling.
Just remember, a fall in savings rates is likely – but isn’t guaranteed. You usually can’t withdraw from a fixed rate until the term ends. So, if rates do rise, locking your money up could backfire.
Fixed terms are pretty appealing while the best savings rates are comfortably trumping price rises. However, if your savings rate is lower than inflation, the future spending power of your money will reduce over time.
What about easy-access savings?
Even though fixed rates are falling, easy-access rates are staying high.
You usually get better returns for locking your money away. But the gap between the highest one-year fixed rates and highest easy-access rate right now, sits at just 0.28%.
Everyone should have cash set aside in easy-access accounts for emergencies. So, every saver should be benefitting from these higher easy-access rates.
But the reality is, big banks are still lagging behind, even with government pressure to pass on the better rates.
Moving your money from the average big bank instant access to a competitive easy-access rate could even double your returns. Just remember, withdrawals from easy-access products usually take up to one working day.
Where can I look for the better savings rates?
When rates are falling, it’s even more important to shop around. Over half of the one-year fixes on offer are already below 5%. And that includes the rates offered by every high street bank.
If you’re not sure where to look, you could start with the smaller banks. Because of their size, they usually need to work harder to attract money, and that means offering better rates to their customers.
Plus, smaller banks offer greater choice for short-term fixes. The products haven’t fallen back dramatically yet, so it could be a good time to consider fixing some money from one to nine months.
But chasing rates from bank to bank is a hassle we can all do without. That’s why we created Active Savings.
You can find and access great rates from our bank and building society partners, all in one easy-to-use online account. Choose rates from a few months to several years. All next to your easily accessible savings.
DISCOVER ACTIVE SAVINGS
If you’re looking to secure a Cash ISA rate, you can also look at the HL Cash ISA. You can spread your money across a fixed rate and easy access through one online Cash ISA.
That makes it easy to match your savings to your needs, without paying more tax than you need to. ISA and tax rules can change and their benefits depend on your personal circumstances.
EXPLORE THE HL CASH ISA
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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1. Subject to these terms and conditions, if you register for our Transfers Cashback Offer (Nov 23 – Feb 24) and
apply to transfer an existing pension, ISA or general investment account from another platform between 16
November
2023 and 29 February 2024 inclusive (the “Offer Period”), you will receive a cash amount after the transfer is
complete, depending on the amount you transfer (the “Offer”). The Offer is funded by us, and the cashback will
not
come from your own cash or investments.
2. You must register for the Offer to qualify. You can do this by completing the online cashback registration
form,
the postal cashback registration form or by asking us via secure message (using your online account) or by
telephone
to register you manually. If you do not register for the offer, no cashback will be paid.
3. If you register for the Offer and we receive your qualifying transfer application(s) within the Offer Period,
even
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4. The cashback payment will be paid into your Loyalty Bonus Account which is separate from your other HL
Account(s).
You will receive the cashback payment within 8 weeks from the date that your last qualifying transfer completes.
The
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withdrawn or moved into another of your HL accounts. If moved into an ISA or SIPP, it will count towards your
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5. We ask you keep your HL account(s) for at least one year from the date that the last qualifying transfer
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transfer
out.
6. It isn’t possible to combine the value of transfers into accounts with different client numbers for the
purpose of
this Offer. The maximum amount of cashback you can receive under this Offer across all pensions, ISA or general
investment account transfers is £4,500.
7. If you register for the Offer and apply to transfer existing pensions within the Offer Period with a total
value of at least £10,000 from other providers to our platform into your HL Self-Invested Personal Pension or
Drawdown Pension, you will receive a cash amount between £100 and £3,500.
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identified in the table accompanying these terms and conditions.
9. If you need more time to decide whether you want to transfer to us, please complete the online extension form and we will extend the pension deadline for you by six
months. Alternatively, call our Helpdesk on 0117 980 9926 or send a secure message through your online account.
10. The following are excluded from the Offer: (1) the transfer of a Junior SIPP, Junior ISA, Child Trust Fund,
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including switches or transfers between or within existing HL accounts or income and interest received on any
assets
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or
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received at the time of the posting of the notice will still be accepted.
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