The average rates on savings accounts have reached their highest level in almost a decade, analysis of the market has found.
According to Moneyfacts.co.uk, the average easy access rate is at its highest since 2012, which saw a rate of 0.87 per cent compared with today's rate of 0.84 per cent.
Just a year ago in September 2021, the same rate stood at a mere 0.17 per cent.
Savers can also benefit from higher returns if they have an easy access Isa, which currently stands at its highest point since September 2019 at 0.92 per cent.
And if they’re disciplined enough to lock their money away for a year, they could benefit from a rate of 2.29 per cent by taking out a one-year bond, which has reached its highest average rate since November 2012.
Today, the average one-year fixed Isa is at its highest level since January 2013 with a rate of 1.96 per cent.
Following the Bank of England ’s recent increase in interest rates with further rises expected, there is broader choice for the number of savings products available.
Moneyfacts have found that there are 1,754 savings deals available, including Isas - which is the highest total since the beginning of the coronavirus pandemic in March 2020, when 1,768 deals were available.
But while average savings rates are seeing a growth, cash savers will still find their returns wiped away by the impact of soaring living costs, with Consumer Prices Index (CPI) inflation hitting 10.1 per cent in the 12 months to July.
Despite that, the increased savings rates are still expected to help offset the impact of inflation on cash savers.
Finance expert Rachel Springall, at Moneyfacts, said: “The average one-year fixed bond arena remains extremely competitive, with the average return breaching two per cent for the first time in a decade.
“Product choice across the savings spectrum also improved, getting closer to levels not seen since March 2020.”
She added: “The back-to-back base rate rises have had a positive influence on variable savings rates, and this, along with notable competition, has seen the average easy access rate rise to its highest level since 2012.”
But she also said that not every account has benefited from the increase in the same way, so it’s important that savers compare their existing accounts and take advantage of the current competition.
Ms Springall also pointed out that, while some savers may be looking for fixed rates in the coming months, others will want the flexibility of being able to withdraw their cash to tackle rising living costs.
She said: “To attract savers, providers will need to respond quickly to compete with their peers and offer a range of products to suit specific needs.”
