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Published: 16/01/2019
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The latest update from the Office for National Statistics (ONS) revealed that inflation has fallen for the second consecutive month, which is not only great news for those looking to make their money stretch a bit further, but also for savers, as there are now 100 savings accounts that can match or beat it!

CPI drop

The ONS figures show that inflation, as measured by the Consumer Prices Index (CPI), fell to 2.1% in December, down from 2.3% in November and sitting just above the Government's 2% target. The latest fall is thought to be primarily driven by falling oil and petrol prices, which in itself could go a long way to boosting consumer finances, and means inflation is now the lowest it's been in nearly two years.

But that's not all. Savers can start to breathe a sigh of relief as many will find that their money will no longer be eroded by inflation, as 94 fixed rate bonds and six fixed rate ISAs (based on a £10,000 deposit) can now match or beat its effects, and within that, 82 fixed bonds and four ISAs pay more than 2.1%!

This means there are now plenty of options for those looking to secure a measurable return on their savings, and they needn't lock their money away for years on end, either – as our savings Best Buys show, it's now possible to secure an inflation-matching or beating return for a commitment of just 12 months.

Short-term appeal

Take a look at the best one-year bonds and you'll see for yourself. Gatehouse Bank, for example, is offering a one-year bond with an inflation-matching expected profit rate of 2.10%, or Al Rayan Bank is offering a 12-month deal with the marginally higher expected return of 2.12% (AER). Alternatively, for a slightly longer commitment, Al Rayan Bank again has the top option by paying an expected profit rate of 2.32% on its 18-month bond, or you can secure 2.25% with BLME or 2.15% with Investec.

There's still a way to go before easy access accounts are able to counter the effects of inflation, and for truly inflation-smashing deals you'll still need to think longer term, but the trend is certainly encouraging. Looking further back highlights how far things have come, as Rachel Springall, finance expert at, explains:

"This time last year inflation hit 3%, which meant that not one single standard savings account could beat it. One year later, savers will breathe a sigh of relief that their cash can provide a real return on a selection of fixed bonds.

"Throughout much of 2018, five-year fixed bonds were the only haven to beat the level of inflation. However, savers can currently match and even beat 2.1% with a one-year bond, showing that as inflation falls and rates rise, savers will have greater choice when choosing an inflation-beating home for their funds."


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