• £258bn held in fixed-rate savings accounts at end of week commencing 28 August, up from £130bn last year
• Non-ISA variants record steepest increase – up 122%
• Greatest switch to fix trend seen in ISA market – fixed-rate ISAs now account for 49% of ISA balances

The amount of money held in fixed-rate savings accounts has nearly doubled over the past year as savers responded to rising interest rates, Paragon Bank analysis has revealed.

Paragon’s analysis of CACI’s weekly data – which compiles cash savings account data from 26 providers - showed that £258 billion was held in fixed-rate accounts as at week commencing 28 August 2023, up from £130 billion at the same point last year – a 98% increase.

Fixed-rate non-ISA accounts experienced the greatest percentage increase, rising by 122% from £53.6 billion to £119.1 billion over the period. Fixed-rate ISA balances rose from £76.5 billion to £138.8 billion over the 12 months, an 81.5% increase.

Conversely, the amount of savings held in instant access variants fell during the period by 9.1% overall, with ISA instant access account balances 16.8% lower at the period end at £137.2 billion, and non-ISA accounts 6.9% lower at £528.1 billion.

Although total balance growth was recorded in the non-ISA fixed-rate variant, the greatest level of switching activity was seen between fixed-rate and easy-access ISAs. Fixed-rate ISA balances accounted for 49% of total ISA balances at the end of week commencing 28 August 2023, compared to 31% at the same point last year. Easy access ISA balances fell from 66% of the total to 49% this year.

The switch was less pronounced in the non-ISA market – non-ISA easy access balances accounted for 89% of the total at the end of week commencing 29 August 2022, compared to 79% this year. Non-ISA fixed rate balances moved from 8% to 18% over the same period.

Moneyfacts data shows the average fixed-rate 1-year non-ISA account has risen from 2.45% at the end of August 2022 to 5.43% this year. The equivalent ISA variant stood at 5.21% in August 2023, up from 1.85%.

Derek Sprawling, Paragon Bank Director of Savings, said: “The shift in the savings market over the past 12 months has been unprecedented, we have never experienced the amount of switching to fixed-rate variants and new account openings before, particularly in the ISA segment of the market.

“To record a 98% increase in fixed-rate balances overall, and a more than doubling of the amount held in non-ISA fixed-rate variants, will have changed savings habits for years to come. Our experience shows that if savers hold money in a fixed-rate account, that money will typically switch to a new fixed-term on maturity.”

For further information contact:

Michael Clarke
Head of Media Relations
Paragon Bank
07740090746

www.paragonbank.co.uk 

Notes to editors:

Paragon Bank PLC a subsidiary of the Paragon Banking Group PLC which is a FTSE 250 company based in Solihull in the West Midlands. Established in 1985, Paragon Banking Group PLC has over £14 billion of assets under management, helping more than 340,000 customers to achieve their ambitions.

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551.