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Published: 22/05/2019

Savers looking to beat the eroding impact of inflation will find that fixed bond rates have risen in the past 12 months, so they can now get a better true return on their cash. Happily, easy access and notice account rates are also increasing, however none of the rates on offer in these sectors are currently able to beat inflation – which means that, if you want to get a real return, now could be the time to lock your cash away.

Inflation rises – but so do rates

Statistics released today show the inflation rose to 2.1% during April, sitting just above the Government target of 2%. Yet despite this, the latest research from shows that it still remains lower than the level seen in both May 2017, when the Consumer Prices Index (CPI) for April was announced at 2.7%, and May 2018 when inflation was 2.4%. Better still, savings rates have risen over both time periods.

As a result, 108 fixed rate bonds and seven fixed rate ISAs (based on a £10,000 deposit) can now match or beat inflation*, and within that, 91 fixed bonds and three fixed rate ISAs pay more than 2.1%. In May 2017, there were no standard savings accounts that could outpace 2.7% and in May 2018 just 13 deals (all fixed rate bonds) could beat 2.4%, with today’s figures highlighting a definite improvement.

Savings market analysis

Top savings deals at £10,000 gross

16 May 2017

23 May 2018


Easy access account

RCI Bank UK – 1.10%

Bank of Cyprus UK – 1.32%***

Virgin Money – 1.50%

Notice account

Paragon Bank – 1.30% (120-day)

Paragon Bank – 1.66% (120-day)

Hampshire Trust Bank – 1.91% (90-day)

One-year fixed bond

Al Rayan Bank – 1.60%**

Gatehouse Bank – 2.00%**

BLME – 2.10%**

Two-year fixed bond

Al Rayan Bank – 1.90%**

Secure Trust Bank – 2.16%

Al Rayan Bank – 2.40%**

Three-year fixed bond

Al Rayan Bank – 2.00%**

RCI Bank UK – 2.31%

Gatehouse Bank – 2.55%**

Four-year fixed bond

Paragon Bank – 2.00%

Vanquis Bank – 2.52%

BLME – 2.50%**

Five-year fixed bond

United Bank UK – 2.30%

United Bank UK – 2.79%

Gatehouse Bank – 2.75%**

**Islamic bank, pays an expected profit rate. ***Rebranded to Cynergy Bank. Source:


“In keeping to our analysis a month ago, inflation is still at a beatable level if savers lock in their cash,” said Rachel Springall, finance expert at “In fact, savers will be earning a truer return of interest today thanks to competition within the savings market over the past 12 months.

“Indeed, just a year ago only 13 standard savings accounts (all fixed rate bonds) could outpace the eroding impact of inflation (paying over 2.4%), whereas today 91 fixed rate bonds can beat it, in addition to three fixed rate ISAs (all paying over 2.1%). Inflation may not be the first thing to come to mind when searching for a savings account, but its impact can mean savers lose out in real terms. Higher inflation means the purchasing power of cash falls, so it is vital savers find a deal to outpace it.”

Look outside the box for real returns

One of the best ways to do that is not only to opt for a fixed bond, but also to look to the more unfamiliar brands, as the top fixed bond rates currently available continue to come from Islamic banks. It’s now possible to find several short-term accounts that can match or beat the current rate of inflation – most of which come from Sharia’a compliant accounts – whereas a year ago, savers would have had to tie up their funds for at least two years to secure a rate higher than 2.1%.

However, despite the overall improvement, “savers who want flexible access to their cash may still be disappointed, as there are still no easy access or notice accounts that can outpace the rate of inflation,” added Rachel. “Regardless, the recent spate of competition from providers looking to retain a prominent place in the market means savers will find better returns available.

“Above all, it remains the case that savers will need to look towards the challenger brands for the top rates, and as long as the provider has the same financial protection as a well-known high street bank, there is little reason why savers should overlook them.”


*Data note: Please note that these savings product numbers only include deals that are available to all UK residents and excludes regular savers and children’s savers (this figure does not count each interest payment option for each account), based on a £10,000 deposit.


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. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

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