Fixed rate savings accounts are climbing — here are the best ones up to 5.02%

The potential for rising interest rates has homeowners facing the prospect of higher mortgage rates – but the flip side is that savings rates are rising too.

New data shows fixed-rate savings are continuing to head upwards, with Moneyfacts figures pinning the average one-year fix at 4.28 per cent – and the best rates on the market currently offering around 4.9 per cent. GB Bank, Meteor and Shawbrook are among the providers at, or close, to that rate.

The best rates for two, three and four-year fixes are currently held by GB Bank (4.98 per cent), GB Bank again (5.02 per cent) and thisbank (5.00 per cent).

Fixed-rate or bonds are a type of savings account where your cash is locked away for the specified period, leaving you unable to access it for that timeframe. For that reason, it’s usually best used for money you know you won’t need for a while. Money you may need at any moment should be in an easy access savings account or flexible cash ISA.

The trade-off to not having access to your cash is that you get a guaranteed rate of return, which won’t diminish even if interest rates fall.

Other considerations, especially for longer fixes like three, four or even five years, include when you receive the interest payments, your tax position and whether your cash might be better used another way – such as investing.

But for those who do want to benefit from guaranteed, inflation-beating returns, there has never been more choice.

Moneyfacts data shows that with one new provider entering the savings market, there are now 160 to choose from – the highest figure on record.

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Caitlyn Eastell, personal finance analyst at Moneyfacts, said: “Savers have been handed another welcome boost this month, with fixed savings rates continuing to climb and competition remaining incredibly strong across the market. The average one-year fixed rate has now risen for six consecutive months, while longer-term fixed rates rose for a seventh month, yet again reaching multi-year highs.

“This continued upward movement is positive news for savers who are looking to secure a guaranteed return, particularly those who have been waiting to see if rates could climb even higher. It also means that savers who locked away their cash some time ago could now find significantly more competitive options available.”

Fixed-term bonds can also be obtained within ISAs to save interest being taxed, though the rates tend to be a little lower. Even so the average rate stands at 4.26 per cent – the highest since September 2024 according to Moneyfacts.

Wherever savers choose to put their money, the important factor is that they are moving their money accordingly rather than sticking with their long-term bank which might be offering worse rates.

Ms Eastell added: “While almost £3.5bn came out from easy access and current accounts, households’ overall deposits still increased by £3.8bn, showing that savers are reassessing where their money is being held and moving their cash between different accounts. During times of uncertainty, this is a healthy habit to sustain and can help savers balance their financial needs. With savings choice at record levels, it’s easier than ever for savers to find better homes for their cash and protect their returns.”

However, there is still more to do to ensure British people are ensuring their cash is not sitting idle.

Quilter research shows there is an enormous £303bn in household cash kept in current accounts earning zero interest.

Due to the effects of inflation which erodes money’s buying power, it means cash earning below 3 per cent – the current inflation rate – in 2026 is effectively worth less than last year.

Calculations from Quilter shows a £10,000 sum effectively left “under the mattress” – or not earning interest – since the end of 2010 would now have the equivalent purchasing power of about £6,300.