Savings rates have climbed above 5% AER, reaching their highest point since 2024. This marks the first time in two years that rates have exceeded the 5% threshold, following a consistent rise since March 2026.
Despite the Bank of England's base rate being held at 3.75% since December 2025, savings providers have been increasing their rates. One potential explanation for this trend is that providers may anticipate continued inflation due to conflict in the Middle East, which could lead to further base rate rises later in the year. At the Bank of England's September meeting, three of the nine Monetary Policy Committee members voted to increase the base rate to 4%, although the majority opted to maintain it at 3.75%.
Market-leading deals for fixed-term accounts of more than one year include 5.25% AER offered by Shawbrook Bank, Vanquis Bank, and GB Bank. For instant-access accounts, some products offer rates as high as 5% AER, though these may come with restrictions such as balance and withdrawal limits. Cahoot's Simple Saver provides a top unrestricted instant-access rate of 4.52% AER.