Moneyfacts’ UK Savings Trends Treasury Report found the average rate on one-year fixed bonds now stands at 0.99%, the lowest since May 2017 when it was 0.98%.

At the same time, the average one-year fixed ISA rate has fallen to 0.91%, the lowest since June 2017 when it was also 0.91%.

Moneyfacts also found that the number of savings products on the market has fallen to a three-year low. There are now 1,548 available savings accounts (including ISAs), down from 1,588 last month and 1,768 in March 2020.

The current number of savings products is the lowest since February 2017, when there were 1,525 deals.

The average interest rate on an easy access savings account fell to from 0.51% in April to 0.40% at the beginning of May, which was the biggest fall since December 2012.

Rachel Springall, finance expert at Moneyfacts, said: “Savers searching for a short-term fixed bond or ISA to safeguard their cash for the next year may be disappointed to find that average returns have fallen below 1% for the first time in three years. Indeed, the savings market is awash with rate cuts and withdrawals, so consumers will need to work fast to secure the best deal.

“As we had seen last month, savings providers pulled the most deals on a month-on-month basis since our electronic records began in 2007 and while the number of products to disappear month-on-month between April and May is less, deals are still disappearing. The number of savings accounts overall has now fallen to its lowest point in three years. Choice is dwindling for savers, in fact 220 deals have now vanished since the start of March, which was before the lockdown and two base rate cuts.”

The top rate available on a one-year fixed rate bond is currently an expected profit rate of 1.5% from Gatehouse Bank. A year ago, the top one-year fixed bond paid 2.20% as an expected profit rate from Bank of London and The Middle East (BLME).

Moneyfacts calculated that on an investment of £20,000, this would mean a total interest loss of £140.

In May 2015 the top five-year fixed bond paid 3.09% from UBL UK. A saver coming off this deal and looking to lock their money away for another five years, would find the best rate at Gatehouse Bank which pays an expected profit rate of 1.85%.

This would result in £1,240 less interest on a £20,000 deposit over five years.

“If savers are looking for some flexibility with their cash then they may turn to an easy access account, however as these pay a variable rate the return could drop at any point,” said Springall, “In fact, the market is already seeing a domino effect of rate cuts, with some of the top deals worsening in recent weeks.”