So, yesterday (17 May 2011) the Office for National Statistics revealed that the Consumer Prices Index (CPI) jumped up to 4.50% in April. That means that in order to beat CPI inflation you now need to earn:
Or, on non-ISA savings…
There are no standard savings accounts that beat CPI inflation (there are a couple of accounts that are inflation-linked – we'll come to these later on).
In order to beat CPI inflation at 4.50% there are just two, five year fixed rate ISAs that are up to the job:
These two cash ISAs are all very well – if you can afford to commit your money for five years and don't mind managing your account by post.
However, there is one key disadvantage: you can only invest money you already have in an ISA and/or up to £5,340 in the 2011-12 tax year.
This begs the question, "what about the rest of my savings?"
There are a couple of inflation linked savings accounts entering the market, but probably the best-known is the National Savings & Investments Index-linked Savings Certificates…
Hurry! If you want to take advantage of these savings certificates you need to act fast.
Being government-backed and in order not to stifle competition, NS&I can only take a certain amount of money in this issue – so you can guarantee they won't be around for long!
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