Choice of savings deals at record high but average rates falling, says website

Savers have the biggest choice of accounts in at least 19 years but the typical rates being offered on accounts are falling, according to a financial information website.

Moneyfacts counted 2,394 savings deals, including cash Isas, on the market in February, the biggest total in its records going back to February 2007.

Excluding Isas, Moneyfacts counted 1,726 “live” savings products, marking the highest number of non-Isa products since November 2009.

The choice of cash Isas rose for the third month in a row, to reach 668 deals, which was the highest on Moneyfacts’ records.

Savings accounts are also being offered by a bigger range of providers.

The number of non-cash Isa savings providers stood at 156, marking the highest number of non-Isa providers on Moneyfacts’ records. The number of cash Isa providers stood at 101, a figure which has been a record high previously.

But while the choice of deals is rising, savings rates are falling.

The average easy access savings rate fell to 2.41% in February, marking the lowest rate since July 2023, when it was also 2.41%.

The average easy access Isa rate fell to 2.58% in February, which was also the lowest since July 2023, when it was 2.54%.

Providers are typically offering 3.76% on one-year fixed-rate Isas, marking the lowest rate since April 2023, when the average rate on a one-year Isa was 3.68%.

The average one-year fixed rate bond fell to 3.81%, marking the lowest rate for this type of account since April 2023, when it was also 3.81%.

The Bank of England base rate was cut in December and further reductions are expected.

Caitlyn Eastell, a personal finance analyst at Moneyfacts, said: “Lesser-known banks help the market grow and can be a source of innovation as they typically need to compete harder for savers’ hard-earned cash.

“However, many average rates continue to fall across the board.”

She added: “It would not be surprising if the fading rate environment leaves savers disheartened, but it’s vital that they do not give in to apathy as they can still get over 4% on the most competitive accounts.

“Isa season is quickly approaching, and many providers will be competing fiercely to make their deals more enticing to new customers.”