Savings expert says now is a good time to get up earn 4.7 percent interest

The cost of living crisis has made life difficult for many Britons but there is some good news for people with savings according to Money.co.uk. Its reasearch shows fixed-rate bond interest rates have increased by more than 400 percent in the past year. © Getty Woman and man on savings app Lucinda O'Brien, personal finance expert at Money.co.uk, said: "Interest rates have soared on fixed-rate bonds over the past 12 months, making them far more rewarding for people with a lump sum to save."For the past few years, savings accounts haven't had the headline interest rates that we have hoped for - until things started changing during a turbulent 2022. "Amidst the cost of living crisis, inflation at a 40-year high and a September mini Budget that caused chaos, providers started to battle with each other by trying to produce the best rates to win customers."This meant we could finally start to see some return if we put our money into a savings account; especially with fixed-rate bonds."

READ MORE: Nationwide issues fraud warning after customers lose £11,796

© Getty Woman looking happy on laptop Customers who can afford to lock away their savings for one year could benefit the most - interest rates on one-year fixed rate bonds have increased 400 percent since this time last year.Ms O'Brien explained: "In January 2022 the average interest rate for a one-year fixed rate bond was 0.71 percent, but by the beginning of December 2022 it had risen to 3.61 percent."This month, the average interest rate for a one-year fixed rate bond stands at 3.59 percent - a slight decrease from December - but still a 406 percent increase from last year. "In comparison, a five-year fixed rate bond had an average interest rate of 1.62 percent in January 2022 and 11 months later it had risen to 4.36 percent. These averages look at all fixed-rate bond accounts that include a minimum deposit of £500 or £1,000 and are open to any savers."DON'T MISS

State pension triple lock 'not sustainable' [WARNING]Link'Loved ones may lose everything unless you write will now [ALERT]Link'Scandal' as HMRC forces pension savers to pay tax they don't even owe [WARNING]

The personal finance expert said now could be a good time to move money and lock in a better intererst rate before savings returns start to fall again.

She added: "There are murmurs in the industry that we shouldn't expect further growth as the market is starting to calm after a volatile year. Providers are pulling back from previous offers and high interest rates, so now we are starting to see returns fall. "For example, the average interest rate for a two-year fixed-rate bond in January 2023 is 3.87 percent, lower than December's 3.93 percent. There are similar patterns across other types of fixed-rate bonds, as the December 2022 to January 2023 comparison highlights only a slight movement."Looking at this data, now would still be a good time to consider a fixed-rate savings account to make the most of the current interest rates. Plus, your savings journey doesn't need to start with a large sum." © Express Budget squeeze chart While fixed-rate bonds aren't right for everyone they could work well for people with savings they don't need to access for at least a year.Money.co.uk has researched some of the best fixed-rate bonds currently available, requiring a £500 or £1,000 deposit. Ms O'Brien continued: "At time of writing, the best fixed-rate bonds are with First Save and its one-year term has an interest rate of 4.3 percent.Alternatively, if you don't mind how long you lock away your money for, the best fixed-rate bond in the market is a three-year term from First Save with an interest rate of 4.8 percent. It's worth noting that its two-year fixed rate bond has an interest rate of 4.7 percent, so the difference you earn is only marginal." Elsewhere, Vanquis One Year Savings Bond has an interest rate of 4.2 percent and its two-year fixed-rate bond has an interest rate of 4.4 perent.However, for longer term saving, Monmouthshire Building Society's Five Year Fixed Rate Bond - Issue 6 has an interest rate of 4.5 percent. Ms O'Brien added: "Remember there is always a chance that interest rates could rise during the fixed-rate term, which means you might not continue to get the best rate. But, they could also fall and it would mean your savings aren't impacted."Fixed-rate bonds can also help you to plan for your savings more easily , as you'll know the exact amount you'll have at the end of the term as the interest rate is guaranteed. "During this difficult time it makes sense to get as much interest as possible from your hard earned savings, and a fixed-rate bond could be the answer."