The Top Fixed Interest Savings Discussion Area

Pompeydave1967

I would go with atom , same @ 4.15% , very easy to use and good customer service.

pecunianonolet

Would check Ford Money as well. They had a very advantageous rate rather long for 4.45% when others were already down to 4.25% and at the time those rates were only available to existing customers and you could just open an easy access account and put a pound in to get access. Got a 1y fix at 4.45% secured just before they dropped it. Also nice, rather long funding window and the 1y fix starts from the day of first funding and not from the day you open. You can opt for monthly interest as well if tax and PSA is of importance.

janusdesign

pecunianonolet said:

Would check Ford Money as well. They had a very advantageous rate rather long for 4.45% when others were already down to 4.25% and at the time those rates were only available to existing customers and you could just open an easy access account and put a pound in to get access. Got a 1y fix at 4.45% secured just before they dropped it. Also nice, rather long funding window and the 1y fix starts from the day of first funding and not from the day you open. You can opt for monthly interest as well if tax and PSA is of importance.

just had a quick check and their offers available to existing customers are the same as those to new customers, e.g 4%, 4.15% and 4.20% for 1/2/3 years.

Johnjdc

Johnjdc said:

whatleytom87 said:

Johnjdc said:

I wonder whether our general consensus that fixed rates are falling might temporarily be wrong, particularly for 1-2 year fixes?

They seem to have stabilised somewhat, meanwhile gilt yields which can be an underlying driver are having a bit of a revival. I think SONIA interbank rates are too but I only have a site which tells me what those are at any one time rather than a graph.

Gilts to the nearest 10bps:

1 year gilt:Truss Peak: 4.2% Sunak Low: 2.7% Most recent: 3.8% Increase since 2nd Feb low point: 0.47%

2 year gilt: Truss Peak: 4.6% Sunak Low: 2.9% Most recent: 3.7% Increase since 2nd Feb low point: 0.61%

I still think if you have the money doing nothing, it's better to fix now than lose out while you wait, but if the money is earning 3% easy access, maybe less clear. Possibly banks will have to follow this up and we start to see 1-year fixed closer to 4.5% again.

But maybe not!

SONIA swaps are what banks price Fixed rates to. See here - https://www.chathamfinancial.com/technology/european-market-rates

Rate significantly lower now than they were during the truss volatility period. 

These rates effectively price in the future direct of base rate, and as you'll see have a negative yield up the terms, although it's moving around a bit at the moment and will be very data release driven this week, if you believe the market consensus then peak Fixed Bond rates very much behind us and will continue to soften from here as this all plays through. 

Take a look at Shawbrook's latest FRB pricing, one of the first to start reflecting that negative yield; many others avoid it given to most consumers it probably looks a bit strange.  

Yes unfortunately I don't have a graph or good historical data for compounded SONIA unfortunately, just the same site as you at any given moment in time - which also shows a recent increase. Generally there's a pretty close correlation in direction of travel between Gilts and SONIA.

I think it's unlikely we'll revisit the Truss highs, but we are certainly some way off the lows. Anything might happen this week given the inflation and wages data due out, though the extent of the march higher makes one wonder if somebody thinks they know something.

I don't really see why peak fixed bond rates would continue to soften in the short term, though in the medium term they would given the yield curve will see more of the higher rate period move to the rear view mirror.

1 year Gilt now up to 4% from 3.6% a month ago and 3.4% at the start of February

1 year compounded SONIA up to 4.36%

I am increasingly in the "it's weird that fixed rates aren't going back up again" camp.

I suspect it's because banks can get instant access deposits at 3% and 1 year is a short enough time period to take the risk on their own balance sheet, whereas for longer time periods rates have been more stable...

TiVo_Lad

Johnjdc said:

I am increasingly in the "it's weird that fixed rates aren't going back up again" camp.

I suspect it's because banks can get instant access deposits at 3% and 1 year is a short enough time period to take the risk on their own balance sheet, whereas for longer time periods rates have been more stable...

There was a brief discussion around this topic in the Business News on Radio 4's Today programme this morning. The view being expressed was that the gap between movements in Mortgage Rates and Savings Rates was now sufficiently large that eyebrows were being raised amongst the regulators. Whilst this doesn't mean anything WILL happen to improve Savings rates, I was suggested that the banks may start to feel the pressure again to raise rates on savings.

Pompeydave1967

And of course the uncertainty for banks over the next 24-60 months. I think they are safe offering 4.15% 1 yr fixed but who knows for 2 , 3 or 5 year deals. I’m 4 weeks away from fixing up £40k again , a year ago I got 1.59% from Shawbrook so obviously better this time around but I’m unsure as to how long to fix for this time.3 years could well turn out better - who knows ?

Johnjdc

TiVo_Lad said:

Johnjdc said:

I am increasingly in the "it's weird that fixed rates aren't going back up again" camp.

I suspect it's because banks can get instant access deposits at 3% and 1 year is a short enough time period to take the risk on their own balance sheet, whereas for longer time periods rates have been more stable...

There was a brief discussion around this topic in the Business News on Radio 4's Today programme this morning. The view being expressed was that the gap between movements in Mortgage Rates and Savings Rates was now sufficiently large that eyebrows were being raised amongst the regulators. Whilst this doesn't mean anything WILL happen to improve Savings rates, I was suggested that the banks may start to feel the pressure again to raise rates on savings.

The logical business explanation for a big gap between mortgage and savings rates would of course be that the banks will always pay savers back, whereas mortgage borrowers can default - and banks are under more and more pressure not to repossess the way they did in the past so that process may take a long time to play out.

cwep2

IMHO as always it's a problem of supply vs demand. Most competitive savings providers have a lending business as well, building societies tend to have mortgages, places like ford money obviously it's loans for people buying cars, some it's credit cards or personal loans or whatever.

Since the spike in rates, the vast majority of completed house purchases that used a mortgage were by people who had secured mortgage offers before the spike, and an unusually high proportion of people whose fixes ended were just sitting on SVR rather than re-fix at the higher rates. In a nutshell new loans at these higher rates were at very low take up levels. See also slowdown in new car sales etc.

But of course as time goes on and mortgage fix rates have come down from the highs, we will start to see more new lending at these higher rates which will spur more demand, and then these lenders will need to finance somehow. Given SONIA and Gilts are all well above 3.8% right now, they will be financing in the wholesale market well north of 4.5% and we may start to see them try and lock in fixed savings against this.

Personally I think we will see 1yr fixes go up from here, probably to 4.4-4.5% by June, but I'm not expecting 5% or anything like that.

Pompeydave1967

Vanquish on the move for 2 & 3 yr fixed - 4.4% for the 3 yr deal could be tempting.

StayinAlive

Al Rayan popped up with 4.31% AER for one year