Easy-access rates have edged up with the top account, AA Easy Saver (Issue 6), paying 1.32%. The rate includes a 1.12 percentage point bonus paid for the first 12 months after which you rate drops to a miserly 0.2%.
The best rate which does not include a bonus is 1.3% on the RCI Bank Freedom Savings Account, although this is covered by the French deposit protection scheme rather than the UK’s FSCS.
Post Office Money’s Online Saver (Issue 28) also pays 1.3%, with FSCS protection, although the rate drops to 1.05% after a year.
On easy-access cash Isas, Sainsbury’s Bank has raised its rate for new savers to 1.15%. AA Savings pays marginally more at 1.16% but you need to move your money after 12 months. The AA account includes an initial bonus paid for the first year you are in the account, after which it drops to 0.2%.
On fixed rate bonds the best one-year rate is 1.80% from Atom Bank. Investec Bank pays this too, but only on balances of £25,000 or more. Post Office Money’s Online Bond (Issue 41) pays 1.78% on balances of £500 or more.
The best two-year deal comes from Paragon Bank, which pays 2.05%.
Savings accounts to beat inflation
To beat inflation compromises need to be made as all of the small number of regular savings accounts that pay more than inflation require savers to have a current account with the provider.
Moneywise keeps tabs on the savings market has found there are accounts that currently beat inflation.
This article was written for our sister magazine Money Observer.