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Two savings accounts now beat inflation

Two savings accounts now beat inflation

Category: Savings

Updated: 06/09/2013
First Published: 05/09/2013

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 It is now over 6 months old so the content may be out of date.

Moneyfacts.co.uk can reveal that there are now two inflation-beating savings accounts.

A few weeks ago when the Office for National Statistics announced Consumer Prices Index inflation fell to 2.8% in July, Moneyfacts.co.uk research showed that there was only one savings account that savers could choose from to negate the impact of tax and inflation.

That account is Skipton Building Society's Online Limited Edition 7 Year Bond paying 3.50% on a minimum investment of £500.

But this week Leeds Building Society launched a chart-topping five-year fixed rate cash ISA that also beats inflation.

5 Year No Access ISA Issue 1 pays 3% yearly on a minimum investment of £1.

Savers will also be able to transfer previous cash ISA savings into this account.

Alternatives to a savings account

Savers looking for a competitive return, but who don't want to commit funds into a long-term bond, could also consider a high interest bank account.

Currently, Nationwide Building Society offers a very competitive 5% interest on bank account balances up to £2,500 with its FlexDirect – Funded account.

Customers will need to pay at least £1,000 into this account every month in order to be paid the 5% rate.

For those with higher balances, Santander's 123 Current Account offers an in-credit interest rate of 3% on balances between £3,000 and £20,000. Customers will also benefit from attractive cashback offers including 1% on water & council tax bills, 2% on gas & electricity bills and 3% on communication bills. This account does, however, charge a £2 monthly fee.

What Next?

Find the best savings rates

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 Any products featured may be withdrawn by their provider or changed at any time.

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