Is this the last chance to bag a one year fixed-rate savings account paying more than 6%?

  • Only two providers are offering one-year fixed-rate accounts paying over 6%
  • Union Bank of India pays 6.05% and Habib Bank Zurich pays 6.03%
  • A savings expert said these rates could be pulled as soon as Friday 

The race to get a top paying one-year fixed rate account is on, but it may only last a matter of days according to savings experts.

Now just two savings providers are offering a one-year fixed-rate account paying more than 6 per cent.

Union Bank of India is offering a one-year fixed rate account paying an interest rate of 6.05 per cent and Habib Bank Zurich pays 6.03 per cent.

Both of these banks are covered by the Financial Services Compensation Scheme protection limits of £85,000. 

Many providers are no longer offering one-year fixed-rate accounts over 6%

Experts do not expect any more accounts paying an interest rate of 6 per cent or over for the fixed-rate market to appear.

Union Bank of India cut its rate from 6.11 per cent on Friday in a sign that the only way is down from here for the best one-year fixed-rate accounts.

The next best accounts after this pay 5.95 per cent, though these are continuing to shift down by the day.

The one-year fixed-rate market fell from a high of 6.2 per cent after NS&I pulled its best ever one-year bond. Last month, savers could choose from a number of accounts paying more than 6 per cent.

The appearance of this product on the market seriously distorted the one-year bond market, as no other savings provider was able to beat this rate.

We asked savings experts how long they expect the two one-year fixed rate accounts paying over 6 per cent interest to last.

James Blower, founder of website Savings Guru says: ‘I’d be surprised if these rates last beyond this week. If the Bank of England holds the base rate at 5.25 per cent then they’re likely to get cut or pulled on Friday I’d expect

Top one-year fixes

While the Union Bank of India and Habib Bank Zurich offer more than 6 per cent for fixing for a year, many savers may be put off by the unfamiliar names. 

However, the independent This is Money savings tables are littered with banks that aren’t exactly household names. 

Below, are the best of the rest:

Gatehouse Bank – 5.9%

Ikano Bank – 5.86%

Al Rayan Bank – 5.85%

Close Brothers – 5.85% 

National Bank of Egypt – 5.85%

You have to scroll further down the table for more familiar names, such as Coventry Building Society and TSB both offering 5.5%. 

‘Union Bank of India cut its rate on Friday from 6.11 per cent and we think they will have to again, as the one year market is shifting down generally to around 5.8 per cent to 5.85 per cent.

While Andrew Hagger, founder of personal finance website MoneyComms says is more conservative in is estimate of when the top rates will be pulled.

He says: ‘I think the days of 6 per cent fixed-rate savings accounts will be gone within the next seven to 10 days.

He says this is because swap rates are slowly falling so it’s not commercially viable for providers to offer rates at that level anymore.

The advice from experts now is to fix up as quickly as you can if you have not already done so, as it is only one way for fixed-rate savings accounts from here.

Mark Hicks, head of active savings at Hargreaves Lansdown says: ‘Savings rates have backed off very slightly in October, but not dramatically so, and there are still some really strong deals around.

‘However, we’re not expecting rates to rise from here, so if you were waiting to see if deals went higher before fixing, then it’s worth securing a deal sooner rather than later.’