Fixed-term savings rates show a fall

Interest rates on fixed savings accounts declined over the past month, new figures have revealed.

According to the Bank of England, the average rate offered by fixed savings has slipped from 3.05 per cent to 2.89 per cent.

The drop is linked to expectations that the official base rate will continue to remain low for the foreseeable future.

The average interest rate delivered by one-year fixed deals was down from 3.23 per cent to 3.17 per cent over the last month; the average for two-year deals is also slightly down, from 3.75 per cent to 3.74 per cent.

But for longer-term deals, returns are looking better. The average interest on three-year account held steady at 4.08 per cent, while the rates on four and five-year savings accounts showed an average increase to 4.24 per cent and 4.66 per cent.

Easy access accounts also rose, with the average interest rate climbing from 0.77 per cent to 0.82 per cent in the last month.