Over 1,500 savings accounts now beat inflation – how long will it last?

Savers are benefiting from another inflation slowdown, helping them achieve real returns from savings accounts but you need to act fast to secure the best rates. Are you putting your money in an account that beats inflation?

pound coins piled up
(Image credit: Getty Images)

If you are looking for the best savings accounts for your cash, then now is the time to take advantage as hundreds beat inflation, which now floats at just above the Bank of England's 2% target.

The latest Office for National Statistics (ONS) figures released today (22 May) showed the inflation rate slowed to 2.3% in April from 3.2% in March.

The drop takes the consumer price index (CPI) closer to the Bank of England’s 2% target and will raise hopes of an interest rate cut in the coming months.

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But it also provides an immediate boost for those seeking the best savings rates.

Data from Moneyfacts reveals there are currently 1,558 savings accounts that offer rates above inflation, meaning they are offering real returns.

That is up from 1,364 inflation-busting rates in April and means nine in 10 savings accounts now beat inflation.

The best savings accounts are currently offering interest rates north of 5%, which is considerably higher than the 2.3% inflation rate. 

The top savings rates on the market now

Savers have plenty to choose from when seeking an inflation-beating rate on their savings.

It comes as savings rates have soared since the Bank of England raised the base rate for much of last year and has kept it frozen at 5.25%.

Research by Moneyfacts shows that savers can beat inflation with 257 easy access accounts, 164 notice accounts, 205 variable rate ISAs, 303 fixed rate ISAs and 629 fixed rate bonds

That is a long way from May 2023 when there were no deals that could beat the CPI rate of 8.7% and in May 2022 when it was 9%.

The best savings rates are at around 5% but remember the high returns also increase the risk of going above the personal savings allowance (PSA) so it may also be worth considering a cash ISA if putting a large sum away.

These are the top savings accounts currently available on a £10,000 balance:

Swipe to scroll horizontally
Type of accountProviderInterest rate (AER)Minimum depositNotes
Easy-access savings Ulster Bank 5.2%No minimum Variable rate account
Notice accountDF Capital 5.35%£1,000180-day notice period
Easy-access ISA Plum5.06%£1Includes a bonus for the first 12 months
Fixed-rate ISA Virgin Money5.05%No minimumOne-year fixed account
One-year fixed bond Habib Bank Zurich plc5.21%£5,000Interest paid on maturity

Will savings rates remain high?

With the Bank of England expected to cut interest rates in the coming months, time may be running out for savings to grab some of these top deals.

A rate cut isn’t guaranteed but if it happens, providers may follow suit by lowering their savings rates.

There have already been signs of savers pulling their deals and rates actually peaked in the autumn last year.

In February, Nationwide slashed the rate on its 8% best-buy regular saver, while Santander has also cut the 5.2% rate on its top easy-access account

“There has been some volatility across the savings market in recent times, with a mix of rate rises and reductions across the piece,” says Moneyfacts spokesperson James Hyde.

“Changes substantially balancing one another out has led to average rates not changing a huge amount recently in the fixed rate arena. Meanwhile, variable savings rates have remained very steady over the past few months, and this has continued in recent weeks.”

 He said savers who are about to have their existing one-year bond mature can beat the market-leader from May 2023, while average ISA rates have settled and pay less than fixed rate bonds.

“As always, it’s vital that consumers consider all the options and be willing to switch if more attractive options are available,” says Hyde.

“It is always best to review all relevant criteria, as eligibility and access are both important factors to take into account.”

Marc Shoffman
Contributing editor

Marc Shoffman is an award-winning freelance journalist specialising in business, personal finance and property. His work has appeared in print and online publications ranging from FT Business to The Times, Mail on Sunday and The i newspaper. He also co-presents the In For A Penny financial planning podcast.