Surge in savers shifting cash from easy-access to fixed-rate accounts

There has been a surge in savers shifting money to fixed-rate accounts, as they look to capitalise on attractive rates while they are available.

Some 37 per cent of people said they have moved money from an easy-access account to a fix in the past three months, with 31 per cent having moved £10,000 or more.

More than half of those switching have shifted their money to one-year fixed rate accounts, while 29 per cent have picked two-year fixed rate deals.

The figures come after Bank of England Governor Andrew Bailey said on Thursday that interest rates are on a ‘gradually declining path’.

Bailey said Britain faces ‘a lot of economic uncertainty’ and that the bank would monitor ‘how the global and domestic economies are evolving’ before further moves are made.

The central bank held rates at 4.5 per cent in its latest decision, but experts are forecasting a further two rate cuts by the end of the year.

Locked-in: More savers are choosing to switch to fixed rate accounts to make the most of higher rates

The Bank of England has cut rates three times from 5.25 per cent back in August.

David Hunt, head of retail savings at Investec Save, said: ‘Savers are opting to lock in higher rates with fixed rate accounts and clearly seem to believe there will be more Bank of England base rate cuts throughout the year.’

With rates expected to fall further, fixed rate accounts are likely to become an increasingly popular choice.

As many as 36 per cent of savers said they intend to move their money out of instant access and notice accounts in the next six months. Despite this, 35 per cent said they were undecided if they should move their money.

Hunt said: ‘It is the sensible choice as long as savers do not need access to their cash for a year or more, but it can be an issue if people change their minds.

‘That is why it is advisable – where possible – to have a range of accounts for different needs, including instant access and notice accounts which pay a higher rate than instant access but enable savers to access their money more quickly than when it’s saved in fixed rate accounts.’

Of those planning to switch, almost a third said they will move more than £10,000, with a fifth intending to move between £5,000 and £10,000.

One-year fixed rates are the most popular choice for those intending to switch, with 47 per cent planning to use one-year accounts, while 29 per cent will opt for two-year fixes and 10 per cent for three-year deals.

Savers can find the best fixed rate deals with This is Money’s fixed rate savings tables.