Moneyfacts UK Savings Trends Treasury Report data reveals that the average one-year fixed bond rate has dropped below 1% for the first time in three years. Indeed, the average rate on one-year fixed bonds stands at 0.99%, the lowest since May 2017 when it was 0.98%. At the same time, the average one-year fixed ISA rate has fallen to 0.91%, the lowest since June 2017 when it was also 0.91%.
The combination of rate cuts and withdrawals from the savings market continued last month, with the number of total savings accounts (including ISAs) dropping to 1,548, down from 1,588 a month before and 1,768 in March 2020. The current number of savings products is the lowest since February 2017, when there were 1,525 deals.
In addition, the average easy access rate fell to from 0.51% in April to 0.40% at the beginning of May, which was the biggest fall since December 2012, three months after the Funding for Lending Scheme launched. Despite the fall in rate, savers may still turn to these vehicles due to their flexibility.