You are here: Home - Saving & Banking - News -

Inflation hits 2.7%: the 17 savings accounts that can beat it

Written by:
Savings accounts with restrictive criteria might be the best bet for struggling savers as inflation rises.

No open-to-all standard savings accounts on the market currently pay a rate higher than inflation, which unexpectedly jumped from 2.3% to 2.7% in April.

Data firm Moneyfacts said none of the 753 savings products available to all UK residents, with no restrictive criteria, can outpace rising prices, meaning savers who opt to house their cash in one risk losing money in real terms.

Despite rising inflation, there’s little sign of interest rates going up anytime soon, especially with the economic uncertainty surrounding Brexit.

And even when the Bank of England raises rates, there’s no guarantee banks and building societies will improve deals on cash savings accounts overnight.

So, what’s the answer if you’re a beleaguered saver struggling to find a home for your money?

Tying your cash up for long periods of time is no longer the answer – the market-leading five-year account from Paragon Bank pays just 2.25%.

Fortunately, there are a few products offering inflation-busting returns – but with one caveat: they all have restrictive criteria.

Regular savings accounts

There are a two regular savings accounts paying above 2.7%.

Saffron Building Society pays 3.5%. The minimum monthly deposit is £10 and you can save up to £200 a month. The account can be opened by post or in branch.

Kent Reliance pays 3%, with a minimum deposit of £25 a month and a maximum of £500. This account can only be opened in branch.

High interest current accounts

There are four high interest current accounts paying above 2.7%.

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.

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.

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.

Regular savings accounts tied to current accounts

There are 11 regular savings accounts paying over 2.7%. These are linked products, which means you must have an account with the bank or building society to be eligible.

Of the 11, first direct, HSBC (Regular Saver, Preferential Rate), M&S Bank, Nationwide and Santander are offering 5% interest.

Saffron Building Society pays 3.5%, HSBC (Regular Saver), Kent Reliance and Lloyds Bank pay 3%, Hanley Economic Building Society pays 2.85% and Chorley & District Building Society pays 2.75%.

See the table below for all the eligibility criteria for these accounts:


There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
university students
The best and worst university cities for buy-to-let landlords

Landlords with properties near the country’s top ten performing universities could earn rental yields of up to 5.22%.