Savings accounts beating inflation rise – top 10 savers and ISAs today | Personal Finance | Finance

The drop in the Consumer Price Index (CPI) means the vast majority of savings deals now beat inflation, new data shows.

The CPI fell to 3.4 percent in the 12 months to February, down from four percent in January.

According to research by Moneyfactscompare.co.uk , there are currently 1,365 savings accounts that beat this inflation rate.

At the time of writing, this translates to 151 easy access; 142 notice accounts; 152 variable rate ISAs; 298 fixed rate ISAs, and 622 fixed rate bonds.

James Hyde, a spokesperson at Moneyfactscompare.co.uk, said: “This fall in CPI means that 80 percent of standard savings accounts currently beat inflation, a far cry from this time last year when none were able to do that.”

While some top fixed rates have decreased slightly over the past month, Mr Hyde noted: “Activity in the market has been mixed recently, with some providers raising their interest paid in recent weeks.”

He continued: “Top variable rates across savings accounts and ISAs continue to hold very steady as they have in recent months, though any potential reduction in base rate may precipitate more movement in this area of the market.”

Easy access savings accounts

Taking the top spot for easy access savings accounts at present is Ulster Bank’s Loyalty Saver with an Annual Equivalent Rate (AER) of 5.2 percent on deposits of over £5,000.

Those with deposits lower than £5,000 will be paid a lower AER of 2.25 percent. Interest is paid annually and on account closure, and withdrawals are permitted at any time up to the daily limits.

For those with smaller deposits, Cynergy Bank’s Online Easy Access Account (Issue 69) offers an AER of 5.1 percent and savers can get started with £1. The interest rate includes 1.1 percent bonus for 12 months. Interest is paid on anniversary of opening.

Fixed rate savings accounts

For one-year fixes, MBNA tops the list with an AER of 5.27 percent on its Fixed Saver. The account can be opened with a minimum deposit of £1,000 and interest is paid on maturity. Up to £750,000 can be invested overall and withdrawals are not allowed until the term ends.

For two-year fixes, Oxbury Bank’s Personal Two Year Bond Account (Issue 23) is offering an AER of 5.11 percent. Savers need £1,000 to invest and interest is paid on the anniversary of opening. Up to £500,000 can be invested overall and withdrawals are not permitted.

For longer-term savers, Oxbury Bank’s Personal Three Year Bond Account (Issue 10) is offering an AER of 4.66 percent. Savers need £1,000 to invest, interest is paid on the anniversary and withdrawals are not permitted.

Easy access Cash ISAs

For those who need instant access to their Cash ISA, Moneybox offers an AER of 5.11 percent. The interest rate includes a 0.96 percent bonus for 12 months and savers can get started with £500. Interest is paid on the anniversary of opening, and up to three withdrawals are permitted without facing a lower interest rate.

For more flexibility, Chip is offering an AER of 5.1 percent with unlimited withdrawals. Savers need just £1 to launch an account and interest is paid monthly.

Fixed Cash ISAs

For one-year fixes, Virgin Money’s Fixed Rate Cash ISA Exclusive (Issue 10) remains top of the list for one-year fixes with an AER of 5.25 percent. There is no minimum investment amount to get started, interest is applied annually, and earlier access will be subject to 60 days’ loss of interest.

For longer-term savers, UBL UK tops the list for two, four and five-year fixes with AERs of 4.7 percent, 4.05 percent, and 4.16 percent respectively. The accounts can be opened with £2,000 and interest is paid annually.

However, earlier access to the two-year saver will be subject to a charge of 180 days’ loss of interest. Meanwhile, early withdrawals from the four and five-year savers will be subject to 365 days’ loss of interest.

Mr Hyde noted: “It remains the case, despite the Financial Conduct Authority’s continued focus on Consumer Duty, that big banks are still failing to offer variable rates which are competitive with the rest of the market.

“However, it’s always wise to check the terms and conditions of all accounts regardless of their headline rate, as some may have restricted accessibility or availability.

“The new tax year in April is less than a fortnight away, and savers who wish to utilise their full ISA allowance now have limited time to do so. Providers would traditionally improve their ISA rates, as competition for last-minute investment intensifies.

“The Bank of England’s projection is that inflation will sit at around 2.8 percent by Q1 2025, which should allow consumers plenty of options to see real-term returns on their cash savings.

“It remains crucial, as ever, that savers consider all options available to them, and are prepared to switch if they could be better served elsewhere.”