Nine savings accounts that are beating inflation

The Consumer Prices Index (CPI) rate of inflation dipped to 2.6 per cent in the year to June, according to the latest figures from the Office for National Statistics.

This means that no available-to-all savings accounts currently pay a level of interest that beats or matches the rate of inflation.

There are fears that inflation could rise even further, so there could be further struggles for savers ahead.

- How to inflation-proof your portfolio

How can I make my cash beat inflation?

There are a small number of regular savings accounts which pay more than inflation – but all require you to have a current account with the provider.

Consumers with a First Direct current account, HSBC Advance or Premier account, M&S Bank current account, Nationwide Flex account or Santander 123 account can access linked regular savings accounts offering 5 per cent interest.

Lloyds Bank’s Club Lloyds account holders can also access a 3 per cent regular saver with their bank. However, these accounts also have limits to the amount holders can pay in each month.

Regular saver providerInterest rate (%)Savings limits (per month)
First direct5£25-£300
HSBC5£25-250
M&S Bank5£25-250
Nationwide5£1-£500
Santander5£1-200
Lloyds Bank3£25-400.

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Current accounts could be a better bet for your savings – especially if you want easy access.

Currently three accounts pay more than the rate of inflation

The Nationwide FlexDirect account pays 5 per cent interest on balances up to £2,500 for the first year, but this drops to 1 per cent thereafter.

Tesco Bank offers 3 per cent on balances up to £3,000 while TSB also pays 3 per cent interest on its Classic Plus current account, but only on balances up to £1,500. Remember that you have to meet certain requirements, such as minimum pay-ins, to get these rates.

- This article first appeared on our sister website Moneywise


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