Savers will cheer the latest inflation figures, as the number of accounts beating inflation triples. Here are the Moneywise best buys.
Thanks to a Consumer Price Index inflation rate of 2.5%, options for savers to match or beat inflation have increased significantly. In an environment of low savings rates and high inflation, Moneywise has listed the number of accounts that beat inflation. This list has at times been as low as six accounts. Thanks to falling inflation, the number of accounts has now boomed to 21.
In fixed-term deposits, savers can now beat inflation using a fixed five-year account. Secure Trust Bank, United Bank UK and Vanquis Bank all now offer inflation-beating five-year fixed savings accounts, all with an interest rate of 2.65%.
Other five-year fixed saver providers that now match or beat inflation include PCF Bank (2.60% for five years and 2.75% for seven years), Close Brothers Savings (2.6%), Ikano Bank (2.52%) and Hodge Bank (2.5%).
However, Kevin Doran, chief investment officer at AJ Bell, caveats this news: “The year-long pay squeeze may have ended with wages finally back on par with inflation in February but the fact is, any cash they hold in savings accounts continues to go backwards in real terms.
“Inflation of 2.5% still comfortably outstrips the returns available from most cash accounts and so anyone with large amounts of cash savings really needs to think about other forms of investments if they want to preserve the spending power of their money."
Alternatively, there are several regular savers on the market that beat inflation. However these accounts require a current account with the provider to open. Moneywise current best buys include:
|Account||Interest rate (AER)||Savings limits (per month)|
|First Direct Regular Saver||5%||£25 - £300|
|Nationwide Flexclusive Regular Saver||5%||£1 - £250|
|HSBC Regular Saver||5%||£25 - £250|
|M&S Bank Monthly Saver||5%||£25 - £250|
|Santander 123 Regular eSaver||5%||£1 – £200|
For a list of the latest savings accounts rates see our best buy page.