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Savers urged to lock in to 5% fixed rates

The Financial Times today ran an article covering the UK savings market and the potential for rates to reduce in the short to medium term. Currently there are a number of 5%+ fixed-rate bond offers which will lock in your deposits for five years, although it has to be said that rates of 5% and above are becoming harder to find. This week saw the Principality building society and the Barnsley building society withdraw a number of fixed-rate bonds, replacing them with reduced rate alternatives.

While rates have peaked as high as 5.45% in the short term, many people believe the figure could fall to around 4.8% over the next few weeks as savings rates start to flatten out with money markets opening up a little. Competition for additional liquidity from various financial institutions over the last few months has seen savings rates increase by 1.5% and many believe the next few weeks will see a number of these attractive offers withdrawn at very short notice.

As ever, if you're looking to lock away your savings for a fixed term it is vital that you take professional financial advice to ensure the offer is conducive to your particular financial situation. At the rate the market is changing it may be advisable to take his advice sooner rather than later!

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