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Number of inflation-beating savings accounts soars, but still dodge the high street

Joanna Faith
Written By:
Joanna Faith

Today’s announcement that inflation dropped to a three-year low in December will be welcome news for savers.

Official figures show the consumer prices index (CPI) fell from 1.5% to 1.3% last month, dragged down by cheaper women’s clothing and hotel stays.

It means 381 savings accounts now match or beat inflation, including 13 easy access accounts, according to data from Moneyfacts.

Last month, 221 savings accounts offered an inflation-beating return but not a single easy access deal did.

The most competitive online easy access account, offered by sharia-compliant Gatehouse Bank, pays an expected profit rate of 1.4% – 0.1 percentage points more than inflation.

Another sharia-compliant bank, BLME, offers the best one-year fixed rate bond deal of 1.8%.

The same bank also offers the best two- and three-year deals at 1.95% and 2.10% respectively.

Avoid the high street

High street banks, on the other hand, are trailing behind when it comes to savings rates.

Not one savings account from a high street bank – aside from regular savers and children’s accounts – beats inflation, data from Hargreaves Lansdown shows.

The best easy access rate available in a branch is 0.35% offered by Santander and TSB – that’s 0.95 percentage points less than inflation.

The best three-year fixed rate account available in branch, meanwhile, is 1.1% from HSBC.

According to research by Hargreaves Lansdown, two thirds of people have a savings account with their current account provider and over half haven’t switched account for at least three years.

Sarah Coles, personal finance expert at Hargreaves Lansdown, said: “Inflation levels continue to drop, so savers have a much easier time keeping their head above water. But the two thirds of people clinging to low lying branches continue to struggle as their savings lurk deep underwater.

“If you’re still saving with a high street giant, it’s high time to let go of your branch.”

Easy access accounts that match or beat inflation

Gatehouse Bank Easy Access Account 1.40%
Cynergy Bank Online Easy Access Account – Issue 26 1.36%
Yorkshire Building Society 1 Year Limited Access Saver Issue 2 1.35%
Chelsea Building Society 1 Year Limited Access Saver Issue 2 1.35%
Ford Money Flexible Saver 1.35%
SAGA Saga Easy Access Savings Account 1.34%
Marcus by Goldman Sachs® Online Savings Account 1.34%
Shawbrook Bank Easy Access – Issue 18 1.33%
Post Office Money® Online Saver Issue 43 1.30%
Britannia Select Access Saver 11 1.30%
Yorkshire Building Society Annual Access Account 1.30%
Loughborough BS Future First 1.30%
Earl Shilton BS Heritage 1.30%
Source: 15.1.20