The savings accounts that can beat 2.9% inflation
The Consumer Prices Index (CPI) rose to 2.9%, up from 2.7% the previous month, the highest rate since June 2013.
According to rate watchers Moneyfacts, not one of the 750 open-to-all, standard savings account currently on the market pays an inflation-beating rate of interest, meaning savers with money in one are losing money in real terms.
The best easy access account from Charter Savings Bank pays a meagre 1.11%.
While tying your money up for long periods of time was once the solution, this no longer pays as the best buy 5-year fixed rate bond from Atom Bank pays just 2.3%.
But there are options for those who still want to house their money in cash.
Regular savings accounts
There are several regular saver accounts on the market paying more than inflation – but all come with a range of criteria to qualify.
Nearly all require a minimum deposit for a year, so you won’t be able to access your cash until the term is up.
The majority are linked products, which means customers must have a current account with the bank or building society to be eligible. Some also require a minimum number of direct debits.
First direct, HSBC, M&S Bank, Nationwide and Santander all pay 5% interest but all have specific criteria (see table below for full details).
Saffron Building Society pays 3%, while HSBC, Kent Reliance and Lloyds Bank pay 3%.
High interest current accounts
Another option is high interest current accounts, which pay up to 5%.
Nationwide’s FlexDirect pays 5% for 12 months on balances up to £2,500. After the first year, the rate drops to 1%. You have to pay in a minimum of £1,000 a month.
TSB Classic Plus pays 3% on balances up to £1,500. You must pay in at least £500 a month and register for internet banking and paperless statements.
Tesco Bank pays 3% on balances up to £3,000, guaranteed until April 2019. You have to pay a minimum of £750 into the account each month and set up three direct debits.
Nationwide FlexPlus pays 3% on balances up to £2,500. There’s no minimum monthly deposit requirement but it comes with an account fee of £10 a month.