Nine in 10 savings accounts are now beating the UK’s inflation rate following April’s drop in the pace of rising prices.
The Consumer Price Index (CPI) fell to 2.3 percent during April, from 3.2 percent in March and according to an analysis by Moneyfactscompare, there are currently 1,558 savings accounts offering interest rates higher than this.
The Bank of England’s modal projection for inflation in the second quarter of 2025 is 2.6 percent. This means that if people secure a good fixed savings rate now, they can achieve inflation-beating returns well into the next year.
James Hyde, a spokesperson at Moneyfactscompare, said: “Over 1,350 saving deals beat inflation at the time of the last CPI announcement, and following [this week’s] news, there are now well over 1,500 options to choose from that deliver real returns on your cash.
“There has been some volatility across the savings market in recent times, with a mix of rate rises and reductions across the piece.
“Changes substantially balancing one another out has led to average rates not changing a huge amount recently in the fixed rate arena.”
Meanwhile, Mr Hyde noted: “Variable savings rates have remained very steady over the past few months, and this has continued in recent weeks. Savers who are about to have their existing one-year bond mature can beat the market leader from May 2023, and those coming off longer-term deals should be able to achieve significantly higher rates if they wish to fix again.”
Topping the table of easy access savings accounts offering the highest interest rate is Ulster Bank’s Loyalty Saver with an Annual Equivalent Rate (AER) of 5.2 percent on deposits of over £5,000
In the one-year fixed rate savings sector, Habib Bank Zurich plc tops the table offering an AER of 5.21 percent.
For two-year fixes, DF Capital takes the top spot with an AER of 5.07 percent.
Meanwhile, Shawbrook Bank takes the top spot for three-year fixes with an AER of 4.41 percent.
Mr Hyde continued: “ISA rates rose significantly during ISA season, especially in the build up to the deadline for utilising allowances on April 5.
“Beyond that date, average rates in the sector have settled down again. The top fixed ISAs are paying less than their fixed rate bond counterparts, with very few accounts currently paying over five percent as it stands.”
For those who need instant access to their cash ISA, Plum is taking the top spot with an AER of 5.17 percent.
In the fixed rate sector, Virgin Money’s One Year Fixed Rate Cash ISA Exclusive (Issue 12) places top for one-year fixes with an AER of 5.06 percent.
The State Bank of India places top spot for two-year fixes with an AER of 4.65 percent.
For three year fixes, Shawbrook Bank takes the lead with an AER of 4.41 percent.
Mr Hyde: “As always, it’s vital that consumers consider all the options and be willing to switch if more attractive options are available. It is always best to review all relevant criteria, as eligibility and access are both important factors to take into account.”
