Banks are moving to reduce the interest rates offered to savers in the wake of the Bank of England’s decision to cut the base rate.
As a result, savers are being warned to take advantage of top rates before they disappear.
Santander has already moved to cut returns paid out to savers – the bank said accounts linked to the base rate will decrease by 0.25 percent from August 15.
Others are expected to follow suit while the best paying fixed-rate savings offers are expected to disappear within days.
Any reductions could deliver a blow to pensioners and working households who rely on decent returns on their savings to protect them against rising prices.
Andy Mielczarek, of challenger bank Chetwood Financial, said: “Any further loss of income will hit hard-working families up and down the country.
“Britons must act now to get the best returns on their hard-earned cash by choosing higher interest fixed rate bonds before rates fall.”
Savings Champion said: “For those savers with money still sitting around, now is the time to look to tie into inflation and base rate beating accounts above 5 percent AER, whilst they are still available.
“You may need to act fast as these offers could be withdrawn at any time.”
The best paying fixed rate bonds include a 1-year offer from Union Bank of India (UK) at 5.4 percent and a rate of 5.26 percent from Raisin.
A two-year fixed rate bond with the Access Bank UK is paying 5.06 percent AER and 5 percent at the RCI Bank,
George Sweeney, investing expert at comparison site Finder, predicted savings rates will fall by up to 1 percent by the end of the year.
He told the Telegraph: “Even a slight drop in the base rate will mean banks will want to get ahead of the curve and start looking to bring down savings rates as much as possible while still looking attractive to savers”.
Currently, the average easy access savings account and ISA pays 3.15 percent and 3.36 percent, according to analyst Moneyfacts.
Rachel Springall, the company’s personal finance expert, said savers looking to maximise returns should seek out the more competitive rates offered by challenger banks.
And the Which? money editor, Ele Clark, said: “Which? research has consistently found that challenger banks and building societies offer better rates than high street banks, so if you’re unhappy with the returns you’re getting, now’s the time to consider switching.”
