Average interest rate for easy-access savings rises to highest since 2009

The average easy-access cash-savings rate has hit its highest point since January 2009, according to analysis.

Savers can now typically get returns of 1.43% with this type of account, financial information website Moneyfacts.co.uk said.

A year ago, in December 2021, the average easy-access savings rate was just 0.19%.

Someone putting away £1,000 for a year at 0.19% would get £1.90 in savings interest, but at 1.43% they would receive £14.30.

Finding decent savings returns can help to offset the eroding impacts of high inflation, although at 10.7%, Consumer Prices Index (CPI) inflation is significantly higher than typical easy-access savings rates.

The average rate on savings accounts where notice has to be given to withdraw funds has also increased to 2.26% – the highest rate since December 2008 and the first time it has breached 2% since December 2008 – Moneyfacts said.

The average easy-access Isa on the market pays 1.55% – the highest rate since November 2012.

The average notice Isa stands at 2.19% – its highest since February 2009 and the first time the average rate has breached 2% since November 2012.

And the average one-year fixed bond rose to 3.51%, to stand at its highest level since December 2008.

Savings rates have jumped higher amid a string of Bank of England base-rate hikes across the year.

While average savings rates are increasing, Moneyfacts said product choice fell for the third month in a row on December, to 1,690 savings deals, including Isas.

Rachel Springall, a finance expert at Moneyfacts, said: “Savings rates are now at their highest levels in over a decade, a significant milestone.

“In 2021, all average savings rates fell to record lows, so it’s positive to see notable improvements across the savings spectrum this year.

“A combination of reasons has been at play for interest rates to rise at such pace, one being the consecutive base-rate rises by the Bank of England throughout 2022, but also increased competition among challenger banks.

“Indeed, one area of the market to see rates reach the highest levels since 2008 was one-year fixed-rate bonds, a popular arena for challenger banks seeking savers’ deposits to fund their future lending.”