Best buy fixed rate bonds available for average of 30 days

Savers have been so desperate to find the best way to make their money grow that best buy fixed rate bonds are taken up so rapidly that they are taken off the market after an average of 30 days or risk over-subscription, it was recently revealed.

Research found that this ultra-short length of time is a byproduct of the Bank of England dropping the base rate to 0.5 per cent more than three years ago, as the decision led to an overall decline in the interest rates carried by savings products in the UK.  Before the base rate dropped, the average amount of time a fixed rate savings product stayed on the market was around three months, with March 2006 reaching a peak of 158 days; two years afterwards, just three months before the Bank dropped its base rate in March of 2009, the credit crunch had reduced this average to 28 days.

Fixed rate savings accounts have always been popular due to their high rates of return, but research indicates that these accounts are slowly becoming less rewarding as the year goes on. The average five-year fix stood at 4.02 per cent this April, but has since declined to 3.88 per cent today, leading to even more pressure to secure the highest-paying bonds before they’re withdrawn by their banks and building societies.

Savings providers have responded to the increased demand for fixed rate bonds over the past few years. There were 274 fixes to choose from in 2010, experts say, while there are 313 today, yet demand is still high, which has contributed to the 30 day average for a bond to remain on the market.

© 2021 All rights reserved. Reproduction in whole or in part without permission is prohibited. See our copyright notice.

Tags: , ,