Fixed-rate savings products surge as average one-year rate hits 4.28%

New Moneyfacts figures indicate that fixed-rate savings products continue to climb, with the average one-year fixed rate now at 4.28%, marking six consecutive months of increase. The most competitive one-year offers hover around 4.9%, supplied by institutions including GB Bank, Meteor and Shawbrook. For longer terms, GB Bank provides the best two-year rate at 4.98% and the best three-year rate at 5.02%, while thisbank leads the four-year market at 5.00%.

Fixed-term accounts lock cash for a set period, delivering a guaranteed return even if market rates fall, though they limit access to the funds. Moneyfacts analyst Caitlyn Eastell highlights that competition is at a record high, with 160 providers now available, and that savers are shifting money from low-interest accounts to higher-yield fixed products. Despite the rise, a large amount of household cash remains in non-interest-bearing current accounts, eroding purchasing power amid inflation.