The average deal pays more than the record lows of August, but the market faces uncertainty before 2021.
Savers are starting to benefit from rising rates and more product choice, but experts warn this could be short-lived.
Analysis by Moneyfacts has found savings rates have started climbing from their record lows reached in August.
The average rate for an easy access account is now 0.23%, up slightly on the 0.22% reached in August but down compared with the typical 0.64% rate of this time last year.
The largest rises have been among long-term savings deals.
The typical rate for a one-year fixed rate ISA has increased from 0.56% in August to 0.62% this month and from 0.75% to 0.85% for longer term fixed rates.
In contrast, savers could have got an average of 1.23% on a one-year fixed rate ISA in October 2019 and 1.41% from longer term deals.
Long term bonds – those that typically run for more than 550 days – now have the highest rates, with the average at 0.93%.
This is still down from 1.59% in October 2019.
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Rachel Springall, finance expert at Moneyfacts, says: “It seems the volatile savings market may well continue in the months to come, especially if savers decide to withdraw their money from National Savings & Investments when rates drop in November.
“Providers will have to review their savings range carefully and remain resilient in these uncertain times, and savers will need to act quickly to be in with a chance to acquire the best deals.”
Product choice has also increased, with 1,531 savings deals on the market. This is the highest level since May and 129 more than those seen in August.
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Tom Adams, head of research at Savings Champion, warns savers need to act fast to secure the best rates.
“It is very much a case of blink and you’ll miss it, but for those who can do this, there are some good deals to be had.”
Andrew Hagger, personal finance expert at MoneyComms, says the prospect of negative interest rates from the Bank of England could push the pricing of savings products down.
“Things may be marginally better in the savings market but we are comparing against a very low base - if the Bank of England resorts to negative interest rates then there will be a tsunami of rate cuts.”
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