Savings rates fell across both variable and fixed sectors in August, the first time all rates have dropped since January 2024, according to new data published by Moneyfacts.

The average easy access rate fell month-on-month to 3.07%, while the average notice rate fell to 4.23%.

Moneyfacts also revealed that average easy access ISA rate fell month-on-month to 3.29%, while the average notice ISA rate fell to 4.08%.

In the bond market, Moneyfacts stated that the average one-year fixed bond rate fell to 4.43%, while the average longer-term fixed bond fell to 3.99%.

According to Moneyfacts’ latest UK Savings Trends Treasury Report, product choice overall fell month-on-month to 2,000 savings deals, which includes ISAs. The choice of Cash ISAs fell slightly to 553 deals, while the number of savings providers fell by one to 143 month-on-month.

Finance expert at Moneyfacts, Rachel Springall, said: “The downward path was perhaps an inevitable direction after the Bank of England base rate was cut, but it can take a few weeks for providers to make a move in response.

“One area of the savings market to take a hit has been easy access accounts, seeing the biggest month-on-month drop since April 2024. Those savers who have not reviewed their savings accounts would be wise to do so, to ensure they are still paying a competitive return.

“The savings market was also unsettled by a contraction in product choice month-on-month, but there remains a healthy variety of choice. Savers may have been concerned about deals disappearing from the market, in particular for fixed rate bonds which guarantee interest.”

Springall added: “Whichever account savers choose, it is imperative that they explore the more unfamiliar brands, as challenger banks currently pay some of the best rates on the market. However, these deals can change quickly, as providers need to react swiftly to any market movements to compete with their peers.”

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