Higher Rates For Long Term Savers

Fixed term savings rates in Britain are on the rise and savers are being advised to tie up their cash in order to make the most of what is on offer.

Rachel Thrussell, head of savings at comparison website moneyfacts.co.uk, claims that consumers can benefit from the continuing upward movement in fixed term savings rates, as providers continue to re-price their fixed term savings products.

Many savers have witnessed reductions in variable savings rates offered by providers this year, but offers on rates for savings periods of more than one year remain strong.

Ms Thrussell said: "The battle to obtain best buy chart recognition continues with more institutions raising rates, and several new providers entering the market. We have not seen rates at such a high level for sometime now, and the trend shows no signs of fizzling out with speculation of more providers following suit."

She added that rates "appear to be a direct response to increasing swap rates", with similar movement taking place in the mortgage market and rates of borrowing increasing.

Around 15 banks and building societies have reduced the rates offered on instant access accounts by as much as 0.4 per cent during the first few months of 2006.