Metro Bank pulls top fixed savings account- what’s the next best rate on the market?

Savings accounts have been under a microscope with rates reaching a 15-year high but the top deals are disappearing fast as Metro Bank today became the latest to withdraw its best buy.

Challenger high-street lender Metro Bank has seized the opportunity to offer the best savings rates on the market over the past few months, after facing its challenges. 

We’ve seen Metro Bank top several MoneyWeek best buy tables including its easy-access savings accounts offering 5.22% and its one-year fixed saver with 5.66%. 

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But, due to popular demand, the challenger bank has pulled all fixed-term savers and fixed ISAs, including its one-year fixed savings account. 

Find out what you can now earn on a one-year fixed savings account, and if other lenders are following. 

Metro Bank withdraws top fixed savings account

The high-street bank boosted the rate on its one-year fixed deal from 5.21% AER to 5.91% AER back in November, when one-year fixed savings fell below the 6% mark for the first time in months. 

On 23 November, Metro Bank dropped the rate on its fixed saver from 5.91% to 5.8%, and on 12 December it plummeted further to 5.66%. Despite a string of rate drops, the savings product still remained a top contender.

The fall was expected though, as the Bank of England has frozen the base rate three times at 5.25% since August 2023, which has caused the best savings deals to disappear. 

Today (3 January 2024), the challenger bank has pulled its 5.66% one-year fixed savings account. The top fixed saver is not available to new customers, but if you are a Metro Bank customer, you can still take advantage of the 5.66% rate. 

Metro Bank stated on its website: “Sorry but due to popular demand and to maintain our service standards, new applications of Fixed Term Savings will not be available until early in the New Year for new customers.”

However, there is no guarantee that Metro Bank will return with its 5.66% rate as some experts predict that interest rates could fall this spring, pushing savings rates down too. 

Sarah Coles from Hargreaves Lansdown said: “At the moment the market is pricing in for the Bank of England to cut rates as early as May, and while that consensus holds, we can expect savings rates to keep falling.”

But, she warns that we shouldn't hold on to the view that interest rates will fall early this year, as “all sorts of unknowns could push it further down the line – from problems in the Middle East pushing up oil prices, to shipping issues causing supply shortages and building inflation more generally.”

“If the market starts to suspect rate cuts could take longer, we would see savings rate cuts halt, and we could even see some rises,” Coles adds. 

What can you earn on a one-year fixed savings account now?

Al Rayan Bank’s 5.5% one-year fixed saver now takes the top spot on our one-year fixed best buy table after Metro Bank pulling its savings product. 

Following that, these are your next top buys:

• Earn 5.3% AER with Ikano Bank. Open online with £1,000.
• Hanley Economic Building Society is offering 5.3% AER. Open online with £1,000.
• Investec Bank is also offering 5.3% AER. Open online with £5,000. 

But, you will need to act fast to bag the top rates on the market, as MoneyWeek has been tracking savings rates and has seen five fixed deals drop in rate, and three lenders pull their products, including Metro Bank in the new year.  

We can see rates falling more towards the 5% mark, a drastic change from when fixed deals were hitting above 6% last summer. But, the top fixed savings account remains above inflation, so it’s a good time to bag the top deals whilst you can. 

Mark Hicks, head of active savings at Hargreaves Lansdown says: “For savers keen to lock in 5% rates, they may only have a few more months, or even weeks to do so, so they should act fast.”

Coles also warns as savings rates continue to dip, “we can expect the smaller banks at the top of the best-buy tables to fill their coffers and lower their rates.”