Savers looking to take advantage of the higher rates being offered by fixed-rate bonds need to move fast as the deals are being pulled in a record 23 days, research has shown.
Demand for the products among savers is leading to them becoming fully subscribed after an average of just 23 days, a fraction of the 158 days that the average fixed-rate bond was available for in March 2006, according to financial information group Moneyfacts.co.uk.
The returns paid on fixed-rate bonds have become increasingly competitive since the credit crunch first struck, as banks and building societies reward savers for locking up their money for a set period of time.
The average rate paid on a fixed-rate bond was 2.73% at the end of October, compared with average returns of just 0.17% on branch-based instant access accounts and 0.4% on tax-free ISAs.
The battle among savers to take advantage of fixed-rate bonds had intensified during the past year as interest rates have fallen steeply, with the bonds now available for less than half the time they were 12 months ago at 57 days.
Michelle Slade, spokeswoman for Moneyfacts.co.uk, said: "The demand for fixed-rate investments continues to increase as savers look to maximise returns.
"Such high demand means that bonds are being fully subscribed quickly, causing providers to pull many of the most competitive deals and replace them with new issues.
"Historically the average shelf-life of a fixed-rate bond was around 120 days, but this has fallen sharply as base rate has plummeted."
Moneyfacts said 34% of all savings searches carried out on its website were currently for fixed-rate bonds, with the average person investing just over £40,000.
The bonds are particularly popular with retired people who are using their savings to generate an income, as the interest rate paid is guaranteed for the term of the bond.
But the group warned that savers with one-year bonds that were maturing were in for a shock, as the best rate available on a bond for this term has dived from 6.7% last year to just 3.95%, offered by National Savings and Investments.
As a result, someone with an average of £40,076 invested would see the interest they earned in a year fall from £1,612 to £1,157.
