Savers urged to 'lock their cash' in high interest rate accounts before its too late
Experts are urging savers to consider fixed rate bonds
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Savers are being urged to "lock their cash" into a high interest rate fixed rate bonds before a likely cut from the Bank of England later this year.
Experts from Moneyfactscompare are reminding Britons to take advantage of these savings products which guarantee bank customers a specific rate over a set period of time.
The financial information website highlighted that the top one-year fixed bond in the UK is currently sitting at 5.25 per cent gross.
This is now 0.30 per cent higher than the top five-year fixed bond of 4.95 per cent, as of July 1, with month-on-month the top one-year fixed bond rate being higher.
Back in January, the interest rate gulf between the best one- and five-year bonds was 5.50 per cent and 4.75 per cent, respectively.
Last year, the top one-year fixed rate bond paid 6.02 per cent, with the average five-year bond paying 5.70 per cent.
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Savers have taken advantage of high interest rates
GETTYRates have been raised by the Bank of England's Monetary Policy Committee (MPC) in its fight to bring down UK inflation.
Last month, it was revealed that the consumer price index (CPI) rate fell to two per cent which is the central bank's desired target.
Despite this, the Bank has been cautious in implementing any immediate cuts to the base rate which remains at 5.25 per cent.
Analysts are pricing in the base rate being reduced in the later half of the year which
Rachel Springall, finance expert at Moneyfactscompare.co.uk,, reminded customers to "compare deals carefully" when picking the ideal fixed-rate bond.
She explained: “The rise and falls of fixed bond rates have been evident over the past couple of years, making it a challenging environment for savers unsure whether to lock their cash into a deal or for how long.
"The top rates are largely offered by challenger banks who strive to draw in deposits to fund their future lending. Such competition and brand variety makes it an interesting space for consumers comparing deals, but this also means savers need to be quick off the mark to secure a top rate before institutions meet their deposit targets.
"However, just because the top rates move, does not necessarily mean the whole market is moving in a similar trajectory, so savers need to compare deals carefully."
According to Springall, bank customers should "not be deterred" by the fact that fixed bond rates have fallen in recent years.
She noted that the top one-year fixed bond currently pays 0.30 per cent more than the top five-year bond but forward that many people will want to take advantage of a longer-term deal.
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The Bank of England base rate has held interest rates at a 16-year high since it was hiked to 5.25 per cent last August GB NEWSThe finance expert broke down why savers should consider fixed rate bonds while interest rates continue to be relatively high.
Springall added: "Fixed-rate bonds are an ideal choice for savers looking for a guaranteed return on their investment, whether that be for a year or more.
"However, not every saver may be prepared to lock away their cash over the longer term.
"It will be interesting to see how rates will fluctuate in the coming months."