The top 10 inflation-beating accounts on the market

Feature by Rebecca Rutt
Savings and Cash ISAs  | 

There are now myriad of savings accounts on the market that beat inflation, after consumer prices index (CPI) fell from 3.6% to 3.4% in February.

Following the recent fall in inflation, savers can now choose from 79 inflation-beating savings accounts - a rise from eight just two months ago.

To beat inflation, a basic-rate taxpayer now needs to find a savings account paying at least 4.25%, while a higher-rate taxpayer needs to find an account paying 5.66%.

In the top two spots are the five year and four year fixed ISA savers from Halifax, paying 4.50% and 4.30% respectively.

"The expected fall in inflation heralds a change in fortunes for savers as more savings accounts finally offer a rate of return that beats inflation, something savers have long been desperate for," says Sylvia Waycot, spokesperson for moneyfacts.co.uk.

However, it is worth noting that many inflation-beating accounts include bonuses.

To illustrate the effects of inflation, £10,000 invested five years ago would now (with CPI at 3.4%) have the spending power of just £8,970, allowing for interest and 20% basic-rate tax.

The top 10 inflation-beating accounts on the market

PROVIDER ACCOUNT RATE PROVIDER ACCOUNT RATE
Halifax ISA Saver Fixed 4.50% Halifax ISA Saver Fixed 4.35%
BM Savings Five Year Inflation Rate ISA (Issue 3) 4.30% Halifax ISA Saver Fixed 4.25%
Clydesdale Bank Cash ISA - Fixed Rate Bond (Issue 16) 4.25% Yorkshire Bank
Cash ISA - Fixed Rate Bond (Issue 16) 4.25%
BM Savings Five Year Fixed Rate ISA 4.25% NatWest Preferential Fixed Rate ISA Issue 41 4.20%
Royal Bank of Scotland Preferential Fixed Rate ISA Issue 41 4.20% Coventry BS Fixed Rate ISA (9) 31.05.2016 4.10%