21 Nov 2024

Sprint needed for best deals

The length of time a fixed rate bond is on the market for has fallen to just 30 days, the lowest level since December 2008 (28 days).

Prior to base rate falling to its all-time low of 0.50%, the average length of time bonds have hung around for has typically been over 100 days, peaking at 158 days in March 2006.

Date	Average number of days bonds are on the market
Today	30
1 year ago	37
2 years ago	70
3 years ago	106
5 years ago	102
Source: Moneyfacts.co.uk 04.07.12

In recent months the interest on average fixed rate bonds has also started to fall, particularly on longer term bonds, which may be fuelling the speed with which these bonds are snapped up.

The average five-year bond rate has fallen from 4.02% at the start of April to 3.88% today.

Sylvia Waycot, spokesperson for Moneyfacts.co.uk, commented:

“Fixed rate bonds continue to be the darling of savers and the banks and building societies have seized this opportunity by increasing the product choice from 274 in 2010, to 313 today.

“However, in recent months there has been a downward trend on the rates of return these bonds promise, resulting in savers rushing to secure the best deals, which is why today these bonds are only around for an average of 30 days.

“Once a few providers start to cut rates, others will follow suit as no provider wants to pay more than they need to attract savers’ money.

“This means that savers must actively hunt out the best deal knowing that when market-leading deals are launched they are oversubscribed extremely quickly.

� “If savers want to secure top rates they literally need to sprint into action or they will end up in second place”

Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.

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