Flows into fixed-rate savings boomed to a record £11.3billion in October, the highest monthly figure since the Bank of England started keeping records in 1997.
By contrast, savings into easy access accounts which pay lower rates of interest with no tie-in fell £4.8bn.
The average rate on two-year fixed-rate bonds hit 3.55 per cent last month, which is the highest since 2009.
The “frenzy to fix” reflects a growing sense that we may be getting near the top of the fixed-rate savings market, said Sarah Coles, senior personal finance analyst at Hargreaves Lansdown: “There is a growing sense that this may be almost as good as it gets for fixed rates, as the BoE England may not lift base rates much higher from here.”
Policymakers will be reluctant to lift borrowing costs much higher, with the UK heading into a recession. “Base rates could even fall, as we go through a difficult year or two,” Coles added.
Banks and building societies have already started to trim their savings. Just a few weeks ago, United Trust Bank paid 5.05 percent on its five-year fixed rate bond, today it pays a notably lower 4.65 per cent, which is still market-leading.
The best-buy one-year fixed rate bond, by Shawbrook Bank, pays 4.30 percent.
Again, this is lower than it was just a few weeks ago when savers could get 4.60 percent.