967 inflation-busting savings accounts remain - act fast to bag the top rates

As inflation rises slightly to 4%, fewer savings accounts beat inflation. Act fast to get the top deals

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(Image credit: SewcreamStudio)

Fewer savings accounts now beat inflation compared with the previous month after the latest inflation figures were released, which means savers will need to act imminently to take advantage of the best savings rates. 

It comes after a surprise rise in the consumer price index (CPI) measure of inflation from 3.9% in November to 4% in December, new data by the Office for National Statistics (ONS) reveals. 

For savers, this news isn’t welcomed as it means fewer savings accounts are keeping up with the rate of inflation. According to Moneyfacts, there are 967 inflation-busting savings accounts currently on the market- that’s 160 fewer accounts than in December

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That said, this is a golden opportunity for savers to switch to a higher paying savings account while they are still on the market, as around 400 billion pounds are sitting idle in UK current and savings accounts, earning 1% interest or below, new data from Yorkshire Building Society and data consultancy CACI reveals.

MoneyWeek has been tracking savings accounts, and you can still earn over 5% on some of the top accounts. 

Find out which lenders are offering inflation-busting savings rates and why you need to act fast to get them. 

Inflation-busting savings accounts

December’s slight rise in inflation is owed mostly to the costs of alcohol and tobacco, plus recreational and cultural goods and services. 

As a result, there are now 967 inflation-busting savings accounts on the market (at the time of writing). Here’s how the data from Moneyfacts compares to the previous month. 

Swipe to scroll horizontally
Type of account Number of savings accounts that beat inflation in DecemberNumber of savings accounts that beat inflation todayDifference in inflation-busting savings accounts available
Easy-access savings109101-8
Fixed bonds553463-90
Notice accounts 135124-11
Easy-access ISAs8472-12
Fixed ISAs246207-39

Fixed savings accounts show the biggest fall in the number of accounts available that beat inflation. 

Though, this is not entirely shocking as James Hyde, spokesperson at Moneyfacts says: “We recently saw the highest month-on-month drop to fixed savings rates in 15 years.”

MoneyWeek has been tracking the best savings deals and has found already this year, 21 providers have dropped the rates on one-year fixed accounts, and four deals have been pulled- including the top paying 5.66% saver by Metro Bank

Right now, here are the top rates you can earn on your savings: 

Swipe to scroll horizontally
Type of accountProviderRate AERMinimum deposit
Easy access savings Cahoot5.2%£1
One year fixed bond SmartSave5.31%£10,000
Notice account United Trust Bank 5.58%£5,000
Easy access ISA Moneybox5.09%£500
One year fixed ISA Virgin Money5.25%£0

The good news is, the top rates still stand above 5%. But as rates continue to fall daily, you will need to act fast to bag the best savings deals.  

Why savers need to act fast 

Since the Bank of England froze interest rates for the third time at its latest meeting at 5.25%, savings rates have been pushed down.  

Sarah Coles, head of personal finance at Hargreaves Lansdown says: “savings rates had already reacted to expectations of lower inflation and rate reductions from the Bank of England, so fixed rates have been falling.”

Deals continue to drop in rate in the new year, and lenders are even pulling best buys. 

But Hyde puts emphasis on savings deals offered by challenger banks. “Despite many providers across the sector significantly cutting rates in recent weeks, challenger banks have continued to occupy the top positions in the charts.”

Whilst this was the case in December, challenger banks have pulled their top deals in the new year. Just yesterday (17 January) we saw Metro Bank drop the rate on its easy access saver from a top-paying 5.22% to 4.51% AER. 

Plus, on 3 January 2024, Metro Bank pulled its best buy 5.66% one-year fixed saver due to popular demand. 

“These providers are often able to offer very competitive deals, however their readiness to pull top rates once targets have been hit means it’s imperative to strike while the iron is hot to secure the best deal,” Hyde adds. 

Vaishali Varu
Staff Writer

Vaishali has a background in personal finance and a passion for helping people manage their finances. As a staff writer for MoneyWeek, Vaishali covers the latest news, trends and insights on property, savings and ISAs.

She also has bylines for the U.S. personal finance site Kiplinger.com and Ideal Home, GoodTo, inews, The Week and the Leicester Mercury

Before joining MoneyWeek, Vaishali worked in marketing and copywriting for small businesses. Away from her desk, Vaishali likes to travel, socialise and cook homely favourites