The top 10 inflation-beating accounts on the market
Feature
by Rebecca Rutt
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% |
