Increasing numbers of savings accounts now beat inflation but savers will have to act fast to bag the best deals.
Now is a gold dust moment for savers as inflation has fallen again to 3.9% and new data by Moneyfacts shows 1,127 savings accounts are offering inflation-busting rates for the first time since 2021- plus savings rates still stand at a historic 15-year high.
Yet, research from Shawbrook reveals that one in four savers are still earning less than 2% on their savings.
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Time is of the essence though, as MoneyWeek data shows the best savings rates are dropping daily since interest rates were held at 5.25% for the third time.
Find out which savings accounts beat inflation and why you need to act now to bag the top rates.
Savings accounts that beat inflation
The Consumer Prices Index (CPI) measure of inflation fell sharply, from 6.7% in September to 4.6% in October- and now to 3.9% in November, according to the Office for National Statistics.
November’s fall is largely owing to a drop in petrol prices and lower food prices.
According to new data by Moneyfacts, a total of 1,127 inflation-busting savings accounts are now on the market, consisting of 109 easy access savers, 135 notice accounts, 84 variable rate ISAs, 246 fixed rate ISAs and 553 fixed rate bonds.
As a result, 235 more savings deals beat inflation compared with the previous month.
In contrast, no savings accounts were beating the 10.7% rate of inflation in December 2022, or in December 2021 when inflation stood at 5.1%.
But James Hyde, spokesperson for Moneyfacts warns that consumers need to “strike while the iron is hot to secure the most favourable deal.”
At the time of writing, these are the top rates on the market right now.
|Type of account
|Easy access savings
|One year fixed bond
|RCI Bank 95 day notice account
|Easy access ISA
|One year fixed ISA
Metro Bank is dominating the best buy table, offering the top easy access saver, one-year fixed bond and one-year fixed ISA. Plus all top accounts remain above the 5% mark.
“Challenger banks continue to dominate the top positions in the charts, with many offering enticing rates to raise capital in a competitive market,” says Hyde.
“However, their readiness to pull popular products once funding targets have been reached can lead to a great deal of variation.”
Why you need to act now to get the top savings rates
These inflation-busting figures might have a short shelf-life, as MoneyWeek data shows savings rates are falling daily.
Just today (20 December), the top 5.7% one-year fixed bond by Al Rayan Bank dropped its rate to 5.5%, giving Metro Bank the top spot with its 5.66% saver.
Previously, Metro Bank was hugging the top spot when it launched its one-year fixed saver offering 5.91% on 10 November. Since then, its rate dipped to 5.8% on 23 November and fell further to 5.66% on 12 December.
Plus, just last week we saw four lenders drop the rates on their one-year fixed bond, and three providers followed yesterday.
To top it all, new data by Moneyfacts revealed that the average fixed savings rate showed its biggest fall in a decade from November to December- highlighting the urgency for savers to act now, as rates could start to fall below the rate of inflation soon.
ISA rates are also dipping just as quickly, as just today we’ve seen two fixed ISA deals pulled and two fixed ISA deal rates drop:
- Secure Trust Bank’s one year fixed ISA pulled its 5.21% deal
- M&S Bank’s one-year fixed ISA rate fell from 5.2% to 4.75%
- Close Brothers Savings 3 Year Fixed Rate Cash ISA offering 4.8% has been pulled
- Shawbrook Bank’s 3 Year Fixed Rate Cash ISA rate fell from 4.85% to 4.05%
Adam Thrower, head of savings at Shawbrook urges savers to act now: “Savers need to change their mindsets to maximise the opportunity to grow their savings while they can, while interest rates exceed inflation,” he says.
“It is reasonable to expect that savings rates are as good as they are going to get, so the window is closing for savers to make the most of the opportunity.”
Vaishali graduated in journalism from Leeds University and she has experience working with the likes of Leicester Mercury, Inews and The Week. She also comes from a marketing background, where she has done copywriting and content creation for businesses.
Currently writing about all things personal finance, Vaishali is passionate about finding the best deals around, whether it's the best credit cards or the cheapest personal loans, as well as sharing top money hacks to help people save and better manage their money.
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