Savers are witnessing increased competition for their savings as rates increase the market, with fixed rates bonds leading the way, Investec Save has found.

Over the past three months, average rates on top-paying savings accounts have increased by up to 0.51%, the firm’s latest research has revealed, with most of the accounts reviewed increasing the interest they pay.

Investec Save said these increases should encourage savers to review where their cash is held and whether their current mix of savings accounts still meets their needs.

The firm’s research found that the biggest increases have been seen on two-year fixed rate bonds, with the average interest rate paid by the top 60 accounts rising by 0.51% to 4.53% AER in the past three months.

Almost three out of four (73%) accounts have increased rates.

Across the top 60 one-year fixed rate bond, the average has increased by 0.49% to an average 4.57% AER, as 92% of accounts boosted rates.

Furthermore, one-year fixed ISAs have increased by an average of 0.47% to 4.38% AER across the top 60 accounts, with 87% of providers increasing rates over the past quarter.

Head of savings at Investec Bank, David Hunt, stated: "Savers are the winners as providers increase rates across the board, with two-year products seeing the biggest increases.

"The speed at which rates are rising highlights the competition among providers and gives savers a much wider range of options on where to deposit their money and in which type of accounts. People need a range of accounts whether it’s fixed rates or instant access depending on what they need the money for."

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