Research from a financial information website has revealed that savers can look forward to better rates on their fixed bonds this year.
Moneyfacts latest survey found that interest rates offered on short to medium term fixed bond savings have been rising since August last year.
The rates, which have been increasing after hitting an all time low of 2.52% in August are reflective of national expectance that the Bank of England will increase the base rate in the next couple of months.
The average interest rate for a one year fixed bond is now 2.85%, which is at it’s highest rate since March 2010, over a year ago.
Two year bonds saw an average rate of 3.42% and three year bonds were 3.7%. Savers looking to invest for five years could look forward ot a 4.17% rate, but very few people will look at those lengths of bond with the possibility of an interest rate increase to stave off inflation in the next few years.
Michelle Salde from Moneyfacts said, “The biggest increase in rates is on short-term deals, which are the most popular amongst savers.”
“Most of the best deals are from smaller building societies. If savers want to make the most of their money they may need to look further afield than their local High Street.
“The markets expect a rise in Bank base rate in the not too distant future and this is being factored in to the rates being offered to savers.”