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Nearly 250 savings deals now pay an inflation-busting rate

Sam Barker
Falling inflation means savers are on the front foot - PA
Falling inflation means savers are on the front foot - PA

Savers stand to profit from inflation falling to a two-year low, as 247 deals now pay a sum that matches or beats the Consumer Price Index – more than double the number of inflation-beating accounts available at the end of last year.

Inflation fell from 2.1pc in Dec 2018 to 1.8pc in January, according to new figures from the Office for National Statistics. 

Falling energy bills helped lower inflation below the Bank of England's 2pc target for the first time since Jan 2017.

In Dec 2018 only 110 savings accounts trumped inflation, according to Savings Champion, the financial experts.

Even then, to beat inflation savers typically needed to lock their money away with fixed-term deals lasting at least three years.

But now savers can outstrip the rising cost of goods and services by putting their money away for just 95 days.

Charter Savings Bank has a 95-day notice account paying 1.9pc, while Secure Trust Bank has a similar offer with a 1.81pc rate.

There are eight one-year bonds paying a rate above 1.8pc, with the best buy being BLME with 2.15pc.

For savers happy to take out longer-term deals, BLME pays a rate of 2.75pc for a seven-year bond and 2.7pc for a five-year option.

Tom Adams, of Savings Champion, said: “On the face of it, the news is great for active savers, with the number of accounts to choose from that match or beat the rate leaping up as a result.

“That said, sadly it is still the case that many savings accounts are paying less than inflation – particularly older accounts and those held with the high street banks.”

However, savers' boost from low inflation rates could be short lived. Energy bills are expected to rise in April when Ofgem, the regulator, raises its cap on many deals.

Additionally, due to Brexit uncertainty many savers are deliberately shunning the best interest rates in favour of lower-rate deals offering greater access to cash.

The best easy-access rate is 1.51pc, offered by Family Building Society.

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