Analysis by data firm Moneyfacts shows 39 per cent of fixed rate bond providers cut rates or withdrew products altogether during September, down from 44 per cent in August, but still significantly higher than the 12 per cent of providers who launched deals or increased rates.

There was also a notable drop in the returns available across all fixed rate bond terms.

The average longer-term fixed rate bond (products with terms over 550 days) was 1.59 per cent last month, its lowest level since August 2017. Meanwhile, the average one-year bond rate fell to a 15-month low of 1.29 per cent.

“Savers need to be quick off the mark to secure a competitive fixed rate bond as interest rates are tumbling,” said Rachel Springall, finance expert at Moneyfacts.

“There appears to be a race downwards in the top rate tables, as fixed rate providers find themselves in a prominent position that may not be sustainable.”

Already this month, Wesleyan Bank launched a lucrative 18-month bond paying 2 per cent, but it was withdrawn after just one day.

Springall said: “That doesn’t necessarily mean that challenger banks are leaving this market as it is clear to see from the top rate tables that many hold the highest positions and very few withdrew their range compared to making cuts in September.

“However, what is noticeable is that longer-term fixed bond returns are falling fast.”

According to Moneyfacts, there is just a 0.3 per cent discrepancy between the average one-year term and the longer-term fixed rate bond.

In some cases, savers can get a better rate by opting for a shorter term than a longer one. For example, some of the best buy five-year bonds pay 2.15 per cent (Axis Bank, Union Bank of India), but they can get 2.22 per cent on a one-year bond (Al Rayan).