It’s been several years since a personal or business bank account provider could proudly say that their easy access savings accounts offered inflation-beating interest rates, but this has finally become a reality after inflation dropped for the second month in a row.
Annual increases to the cost of living in the UK, as measured by the consumer prices index, has fallen to 2.4 per cent, a mere 0.4 percentage points above the Bank of England’s 2 per cent target and a drop of 0.4 percentage points from last month’s 2.8 per cent figure – a far cry from last September’s 5.2 per cent inflation rate.
This is good news for savers looking to make real returns on their investments, as anyone currently paying basic tax need only find a savings product that offers a 3 per cent interest rate in order to come out ahead of the game. Now that the CPI has dropped yet again, there are eleven easy access accounts that savers can choose from – something unheard of since November of 2009.
Not only are there 11 easy access savers that currently beat inflation, there are many more longer-term options open as well. By current count, there are 192 fixed rate bonds, 76 fixed rate ISAs, and eight cash ISAs that all offer real returns after inflation is taken into account – at least for basic rate taxpayers.
Those paying the higher rate are not quite so well off, as the four percent interest rate needed to counteract the effects of the taxman simply doesn’t exist when it comes to easy access savings accounts. There are only seven fixed rate ISAs and 11 fixed rate bonds that offer succor to those unfortunates paying the higher rate.