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Combat inflation with a tax-free account

Combat inflation with a tax-free account

Category: Economy

Updated: 13/02/2013
First Published: 13/02/2013

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The Consumer Prices Index (CPI) remained at 2.70% during January, above the Government's target of 2% and spelling yet more frustration for the nation's beleaguered savers.

Research compiled by Moneyfacts.co.uk has found that out of 874 standard savings accounts, just six pay rates of return that beat or match the rate of inflation.

All of these accounts are fixed-rate cash ISAs of between three and five years, so savers must be willing to lock their money away for the duration of the term.

Inflation beating accounts:

BM Savings
BM Savings
3 Year Fixed Rate ISA

2.80% AER/Gross
  • Minimum investment £50,000
  • Further additions allowed whilst issue is open
  • Transfers in accepted
  • Earlier access allowed, subject to loss of interest: Up to 3 years - 270 days, up to 2 years – 180 days, up to 1 year – 90 days
  • Can be operated by post only

See best buys

Penny says: "This account pays an inflation-beating rate of 2.80% to savers with deposits of £50,000 and over.

"Unlike many fixed rate accounts, funds can be accessed early although this will be subject to a loss of interest penalty depending on the remaining term."

Nationwide Building Society
Nationwide Building Society
4 Year Fixed Rate ISA

2.70% AER/Gross
  • Minimum investment £1
  • Early access permitted upon account closure, subject to 320 days' loss of interest penalty
  • Transfers in accepted
  • Further additions not permitted
  • Can be operated in branch only

See best buys

Penny says: "This attractive tax-free bond pays a competitive rate of 2.70% to savers looking to invest their money over a four-year period.

"This ISA requires a minimum deposit of just £1, although savers would be wise to invest as much as possible as further additions cannot be made during the term of the deal."

Cheshire Building Society
Cheshire Building Society
4 Year Fixed Rate Cash ISA

2.70% AER/Gross
  • Minimum investment £100
  • Early access permitted upon account closure, subject to 320 days' loss of interest penalty
  • Further additions not permitted
  • Transfers in accepted
  • Can be operated in branch only

See best buys

Penny says: "Paying a rate of 2.70%, the 4 Year Fixed Rate Cash ISA offers an attractive savings deal to investors with deposits of £100 and over.

"It is important to remember that this account can only be operated in branch of Cheshire Building Society."

Derbyshire Building Society
Derbyshire Building Society
Fixed Rate ISA Issue 65

2.70% AER/Gross
  • Minimum investment £100
  • Early access permitted, subject to 320 days' loss of interest penalty
  • Transfers in accepted
  • Further additions allowed whilst issue is open
  • Can be operated in branch only

See best buys

Penny says: "This competitive ISA pays an inflation matching rate of 2.70% to savers looking to invest over a four-year period.

"Additional deposits can be made during the term of the deal and early access to funds is also permitted, although it is important to remember that this is subject to a 320 days' loss of interest penalty."

Dunfermline Building Society
Dunfermline Building Society
Fixed Rate Cash ISA Issue 56

2.70% AER/Gross
  • Minimum investment £100
  • Early access permitted, subject to 320 days' loss of interest penalty
  • Transfers in accepted
  • Further additions allowed whilst issue is open
  • Can be operated in branch only

See best buys

Penny says: "As with the previous account from Derbyshire Building Society, this deal pays an inflation-matching rate of 2.70% to savers with investments of £100 and over.

"Savings funds from previous ISA allowances can be transferred into this account."

Halifax
Halifax
ISA Saver Fixed

2.70% AER/Gross
  • Minimum investment £500
  • Early access permitted upon account closure, subject to 365 days' loss of interest penalty
  • Transfers in accepted
  • Further additions not permitted
  • Can be operated in branch or by telephone

See best buys

Penny says: "Halifax launched this attractive five-year fixed-rate ISA this week, paying an inflation-matching return of 2.70%.

"Funds can be accessed within the term, although savers must be prepared to incur a 320 days' loss of interest penalty."


What Next?

Compare the best savings rates
3, 4 & 5 year fixed rate ISAs

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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