Out of the 58 saving accounts that currently beat inflation, only one is from a high street bank or building society (Nationwide), according to the financial analysis site.
Defaqto found the top rates for instant-access savings accounts are all offered by mobile apps and digital savings platforms, with the big high street names trailing behind and most rates sitting below 1.5%.
Katie Brain, banking expert at Defaqto, said: “Although the Bank of England base rate didn’t change last month, savings rates have remained high, especially compared to inflation, which is currently at 3.4%. But our latest best buys for July shows that you’ll need to go beyond the high street to find the best deals. The top rates on offer are now from mobile or online-only providers such as Atom and Snoop.”
The best paying savings accounts
Two of the top three instant-access savings accounts come from mobile-only banks. Atom Bank pays 4.75% and Snoop 4.6%, both significantly above inflation.
The best buy easy-access savings accounts are currently:
Why Life Insurance Still Matters – Even During a Cost-of-Living Crisis
Sponsored by Post Office
- Atom Bank – Instant Saver Reward – 4.75% AER
- Snoop – Easy Access Savings Account – 4.6% AER
- Cahoot – Simple Saver – 4.55% AER
- Coventry Building Society – 4 Access Saver – 4.5% AER
- Skipton Building Society – Bonus Saver – 4.5% AER
- Kent Reliance – Easy Access Account – 4.46% AER
The top-paying cash ISAs
A similar trend was noted for cash ISA rates. Out of the 112 instant-access cash ISA products currently on the market, 45 offer rates above inflation, but none of these are offered by high street providers.
The best paying instant access cash ISAs currently are:
- Plum – Cash ISA – 4.95% AER
- Moneybox – Cash ISA – 4.65% AER
- Tembo – Cash ISA – 4.64% AER
- Moneybox – Open Access Cash ISA – 4.45% AER
- Charter Savings Bank – Easy Access Cash ISA – 4.4% (online only)
- Hargreaves Lansdown Active Savings – Atom Bank Easy Access ISA – 4.4%
In comparison, the best cash ISAs from banks with a high street presence were TSB’s Save Well Limited Access ISA at 3.4% and Halifax’s ISA Bonus Saver at 3.05% AER.
Watch out for the small print
However, savers were warned that some of the highest rates on offer can be due to introductory bonus rates or carry restrictions that, if breached, affect the interest rate.
Brain said: “Some accounts slash your rate after just three months, particularly cash ISAs, or limit how often you can access your money. For example, Cahoot and Skipton Building Society drop their rate after 12 months, and with Atom Bank, the interest rate drops if a withdrawal is made that month.
“Cahoot also offers the highest savings account rate via its Sunny Day Saver product, which offers a 5% interest rate – the highest on the market – but only for balances up to £3,000. After this, no interest is paid.
“In the cash ISA world, 4.95% from Plum is the highest rate on the market but has an introductory bonus rate for three months. After this, it drops to 3.29%. Similar small print applies to some of the high street banks’ products too, so make sure the product suits your needs before opening.”
