Now is the time to bite the bullet and lock in your savings for the long haul, says SYLVIA MORRIS

A new trend is taking hold among savers, banking insiders tell me — and it’s a trend that has my stamp of approval.

Savers are finally locking in their money for longer periods of time to get the highest rates before they disappear.

Since fixed rate bonds and Isas came back into the limelight a few years ago, the most popular option is the annual version.

As interest rates continued to rise, savers were – understandably – unwilling to commit for longer.

The rising cost of living has also made savers nervous about tying up nest eggs in case they need them to pay the bills.

Now savers are piling into two-year fixed-rate deals to ensure their money beats inflation for longer.

But with the inflation dragon seemingly slain and the rate of growth falling to the magic 2% target in the latest figures, there is a risk that the savings rate could similarly fall.

At the start of this year, money markets were predicting a series of key rate cuts starting in March.

But inflation has been falling more slowly than expected, and the key rate is still at 5.25 percent after ten months.

However, all signs point to an imminent rate cut and markets expect the Bank of England to cut rates in August.

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Competition between banks and building societies has so far kept rates on bonds and Isas relatively high.

As I predicted last week, cash Isa rates are still on the rise – with the best annual rate now 4.93 per cent from Shawbrook.

The best one-year bonds pay more than 5 per cent, with 5.21 per cent direct from Vanquis Savings or Ziraat Bank through savings platform Raisin leading the way.

But two-year bond rates are nipping at their heels. Close Brothers Savings and Vanquis pay 5.06 per cent and Access Bank pays 5.05 per cent.

The two-year version might turn out to be a better bet than going for a one-year bond if you plan to renew it in a year.

Next year, you’d have to pick up 4.8 percent on a one-year bond to beat 5 percent for two years on sale, which seems unlikely.

For those who want a longer-term bond and won’t need access to the money during that time, choose one that pays interest annually rather than compounding it at the end of the term. You can then use your personal savings allowance for each year’s interest.

Otherwise, go for a fixed rate Isa. The top two-year rates are just above 4.6 percent, with United Trust Bank and Close Brothers at 4.67 percent and Secure Trust and Cynergy Bank at 4.66 percent.

Sainsbury’s sale is a chance to jump ship

A word of warning to all Sainsbury’s Bank customers – it’s time to think about switching to a new bank.

It is to sell its £2.6bn customer deposit savings arm to NatWest, with the deal expected to close in the first half of next year.

If I had a savings account or cash Isa easily accessible at a supermarket bank, I wouldn’t be hanging around in the hope that the rates would improve once it was owned by NatWest.

Sainsbury’s Bank offers such low rates that it could cost you every month you stay put.

For example, its Cash Isa plummeted from 4.4 per cent last month to 3.5 per cent for new customers at a time when other providers were raising rates.

The rates on older variable rate accounts are terrible and vary greatly depending on when you opened yours; most of them are terrible and only 1.45 percent.