Menu
Save, make, understand money

News

The savings accounts which FINALLY beat inflation

The savings accounts which FINALLY beat inflation
Emma Lunn
Written By:
Emma Lunn
Posted:
15/11/2023
Updated:
27/11/2023

Today’s drop in inflation means there are now savings accounts offering interest rates that beat the rising cost of living – for the first time in two years.

The Consumer Prices Index (CPI) measure of inflation fell to 4.6% during October, from 6.7% in September.

The inflation fall means there are now some standard savings accounts that beat inflation for the first time in more than two years.

This time last year there were no savings accounts that could beat the October 2022 peak inflation figure of 11.1%, while in November 2021 there were also no deals that could beat the October 2021 inflation figure of 4.2%.

Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “It has taken over two years, but finally inflation has fallen to a level where there are now some standard savings accounts that can outpace its eroding prowess.

“The savings market has felt a few rate cuts since last month’s inflation announcement, with fixed rate bonds under the spotlight. Savers will no longer find a bond that pays more than 6%, but it is worth noting that challenger banks are still holding the top spots despite shuffling positions.

“These institutions can launch enticing offers to attract deposits for their future lending, but they also act quickly to pull offers when they become fully subscribed. Consumers will need to act quickly to grab the top deals on offer and consider the more unfamiliar brands when comparing deals.”

Higher rates from smaller brands

Many of the top rate savings deals that pay 5% or more for new customers do not come from the big high street banks – building societies, challenger bands and Islamic banks top the best buy tables instead.

Springall said: “It’s simple and easy to switch, but savers must check the terms of any new account carefully, such as those with withdrawal restrictions or introductory bonus rates. To take full advantage of the best deals, it’s worth spreading any investment across easy access accounts and fixed bonds, but there are also notice accounts to consider which currently pay competitive rates.”

Where to bag the best savings rates

Assuming you have £10,000 or more to save, these are the top paying savings accounts currently available, according to Moneyfacts. All of these beat the current inflation rate of 4.6%.

  • Easy access: Ulster Bank 5.2%
  • Notice account: Shawbrook Bank (120-days notice) 5.56%
  • One-year fixed rate bond: Metro Bank 5.91%
  • Two-year fixed rate bond: JN Bank 5.8%
  • Three-year fixed rate bond: JN Bank 5.9%
  • Four-year fixed rate bond: JN Bank 5.6%
  • Five-year fixed rate bond: JN Bank 5.6%