Moneyfacts has called on consumers to read the small print as institutions fight to attract their savings business.

Joanna O’Brien, savings analyst at Moneyfacts, said: “Consumers need to look at rate guarantees with caution and consider them in the same way as they would a bonus on a savings account.

“Many guarantee rates to be at least equal to Base Rate until a set date or indefinitely and savers can be sure that their rate will never drop below Base Rate.

“What savers must be more careful of is when a rate paid is greater than Base Rate. They need to ensure they keep an eye on what happens to the rate both during the period of the guarantee and after as the rate could potentially drop a long way.

“On some products the rate guarantee will only apply to certain tiers, so savers need to make sure they will be eligible for the guarantee before investing.

“By shopping around, consumers can obtain a far higher variable rate without worrying about rate guarantees that aren’t worth the paper they are written on.”