The top 10 inflation-beating accounts on the market

Published by The Moneywise Team on 18 October 2011.
Last updated on 22 January 2014

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With the consumer prices index currently standing at 2.7%, there are a number of inflation-beating accounts available.

Following the recent rise in inflation, savers can now only choose from around 40 accounts out of 965 if they want to beat tax and inflation. Only a handful of these are Fixed-rate accounts, and the rest are ISAs.

To beat inflation, a basic-rate taxpayer now needs to find a regular savings account paying at least 3.37%, while a higher-rate taxpayer needs to find an account paying 4.5%.

In the top spot is the five year bond from State Bank of India  paying 4.2%. The full table of the top 10 accounts is listed below.

 
To illustrate the effects of inflation, £10,000 invested five years ago, in an account paying the top rate of 4.2% AER, would now (with CPI at 2.7%) have the spending power of just £10,386 after you have paid 20% basic-rate tax, taking inflation into account.

The top 10 inflation-beating accounts on the market

ACCOUNT TERM RATE ACCOUNT TERM RATE
State Bank of India Five-year bond

4.2%

State Bank of India Four-year bond

3.8%

Triodos Bank Five-year bond

3.75%

State Bank of India Three-year bond

3.65%

United Trust Bank Five-year fixed rate ISA

3.35%

Coventry 
BS

60-day notice ISA

3.25%

Halifax Five-year fixed rate ISA

3.2%

Halifax Four-year fixed rate ISA

3.1%

Marks and Spencers Bank Three-year fixed rate ISA

3%

Halifax Three-year fixed rate ISA

3%

 

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