Banks and building societies have slashed interest rates for loyal customers with instant access accounts as they look to lure new savers with eye-catching offers on long-term fixed-rate products.

The credit crunch has created a “dash for deposits” with rates as high as 7.2 per cent paid on fixed-rate savings. However it is only long-term savers, happy to lock their money away for extended periods, who have been the beneficiaries, an analysis by Moneyexpert.com, the comparison site, has shown.

The average rate paid on instant access accounts has dropped from 3.76 per cent in January to just 3.3 per cent now, said Moneyexpert. Northern Rock’s Silver Savings account, for example, paid 5.75 per cent in January but has since been cut to 5.02 per cent.

The best rate paid on instant access savings is currently Kaupthing Edge’s internet only account at 6.55 per cent on a minimum deposit of £100, while Birmingham Midshires pays 6.52 per cent on a minimum £1 deposit. Abbey pays 6.3 per cent but requires a minimum deposit of £1,000.

A mere 145 instant-access accounts currently pay above 5 per cent, the official interest rate set by the Bank of England, compared with 270 six months ago. Of the 1,501 instant access savings products on the market, nearly 300 accounts pay a paltry 2 per cent or less. For example, Halifax’s Instant Saver Monthly pays just 1.57 per cent while Nationwide’s Cash Builder pays 1.5 per cent.

Sean Gardner, director of Moneyexpert, said: “Banks are boosting rates on bonds and other long-term products at the expense of instant access accounts. They want to know they have money to play with.”

He added: “This explains why there are still some great deals on offer in regular savings and fixed term bonds. Anyone who has some cash set aside could benefit significantly.”

According to Moneyexpert, 2.2 million people swap savings accounts every six months.

ICICI, the Indian bank, has paid the most consistent rate at 6.16 per cent on a minimum deposit of £1. The next most consistent rate has been Sainsbury’s at 5.50 per cent on a minimum £1 deposit.

Mr Gardner said: “Having instant access to your cash is a genuine benefit but for many savers it means you have to watch the interest rate set by your bank carefully. If you are in any doubt, compare other offers and see if you can get a better deal elsewhere. It’s a saver’s market so don’t accept a bad rate.”