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77 savings accounts now beat inflation

77 savings accounts now beat inflation

Category: Savings

Updated: 25/04/2017
First Published: 14/01/2014

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 It is now over 6 months old so the content may be out of date.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 latest official inflation figures, released this morning, show that the Consumer Prices Index (CPI) fell to 2.0% in December. This is another drop from November's figure of 2.1% and is the lowest level of inflation seen since 2009, and in a welcome boost for savers there are now 77 savings accounts that can beat it.

In order to counter the effects of tax and inflation, a basic rate taxpayer will need to find a non-ISA account that pays at least 2.50% per annum – and there are currently 77 of them available across the ISA and non-ISA market.

This is a significant increase on the 48 inflation-beating accounts that could be found a month ago and even more so since September, when just nine accounts could do the same, with the continued drop in inflation painting a much more positive picture for the nation's savers.

However, savings rates are still at record low levels across the board, so although the number of inflation-beating accounts has improved it still might not lead to any measurable returns.

As Sylvia Waycot, editor of Moneyfacts.co.uk, points out:

"the average no notice savings account pays just 0.64% interest while the average ISA pays 1.64%, so unless savers are willing to lock their money away in a fixed rate bond there isn't much opportunity to achieve the 2.50% needed".

There might be better news, however, when ISA season hits. The withdrawal of the Funding for Lending Scheme could signal a return to a more competitive savings market, although it could take a while for the effects to be seen. "The ISA season will be a good indicator of how things may develop for the rest of the year," Ms Waycot said.

What Next?

Check out our monthly graph on inflation beating savings accounts

Find an inflation-beating savings account

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 Any products featured may be withdrawn by their provider or changed at any time.

 
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