Derin Clark

Derin Clark

Online Reporter
Published: 18/12/2019

Consumers looking to deposit their money into a savings account will be disappointed with the news that as the Consumer Price Index (CPI) has remained at 1.5% during November and savings account rates were cut this month, fewer savings accounts now offer inflation-beating rates.

According to research carried out by Moneyfacts.co.uk, there are now 171 fixed rate bonds, 41 fixed rate ISAs and nine notice accounts (based on a £10,000 deposit) can now match or beat inflation*. Within that, 145 fixed bonds, 30 fixed ISAs and six notice accounts pay more than 1.5%.

Savings market analysis 

Top savings deals at £10,000 gross 12 Dec 2017 19 Dec 2018 Today
Easy access account Virgin Money - 1.36% Virgin Money - 1.50% Shawbrook Bank - 1.41%
Notice account Secure Trust Bank - 1.65% (180-day) Gatehouse Bank - 1.87% (180-day)** United Trust Bank – 1.75% (200-day)
One-year fixed rate bond Atom Bank – 1.85% Gatehouse Bank – 2.10%** BLME – 1.80%**
Two-year fixed rate bond Secure Trust Bank – 2.06% Masthaven Bank – 2.35% BLME – 1.95%**
Three-year fixed rate bond Atom Bank – 2.20% Tandem Bank – 2.40% BLME – 2.10%**

Four-year fixed rate bond

Masthaven Bank – 2.23% Vanquis Bank – 2.50% BLME – 2.10%**
Five-year fixed rate bond Secure Trust Bank – 2.51% Atom Bank – 2.70% UBL UK – 2.50% (payable on maturity)

**Islamic bank, pays an expected profit rate. Inflation announcement dates.

Rachel Springall, finance expert at Moneyfacts.co.uk, said: “Savers looking to earn a decent return on their nest egg will still need to search for a savings account that beats inflation, and if they want quick access to their cash – it will be eroded in real terms today.

“There is still not one easy access account on the market that beats 1.50% – in fact, over the past month rates have been cut on these popular accounts. The leading easy access deal from Marcus by Goldman Sach® was chopped down from 1.44% gross / 1.45% AER to 1.34% gross / 1.35% AER today. Those who are prepared to invest for one year or more will find that rates have fallen drastically during 2019. Rates are on a downward trajectory due to economic uncertainties and a slowdown in competition.

“Savers hoping to get a decent fixed return over the next year on a one-year fixed bond will find the top deal pays less than 2% today, at 1.80% as an expected profit rate from BLME. This is 0.30% less than the top deal a year ago, so anyone coming off the then chart-topping expected profit rate of 2.10% from Gatehouse Bank will feel disappointed to not find a similar return for the same duration on the market today.

“Inflation is expected to rise in the coming years, with the CPI in Q4 2022 predicted to hit 2.2%, so if savers wanted to outpace this today, they only have one five-year fixed rate bond with which to do so – an account from UBL UK that pays 2.50% on maturity. Locking into a five-year fixed savings account may be a commitment that may not sit well for some savers who hope the savings market will improve in 2020.”

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.

Cookies

Moneyfacts.co.uk will, like most other websites, place cookies onto your device. This includes tracking cookies.

I accept. Read our Cookie Policy