Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

UK Savers Lock in Cash to Beat Inflation Erosion

Personal_Finance / Savings Accounts May 23, 2019 - 03:07 PM GMT

By: MoneyFacts

Personal_Finance

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. Not only this, but 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.

Despite the fact that inflation has now risen above the Government target of 2%, the latest research from Moneyfacts.co.uk 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.


Statistics released today show the CPI rose to 2.1% during April, meaning 108 fixed rate bonds and seven fixed rate ISAs (based on a £10,000 deposit) can now match or beat inflation*. Within that, 91 fixed bonds and three fixed 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.


Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:

“In keeping to our analysis a month ago, inflation is still at a beatable level if savers lock in their cash. In fact, savers will be earning a truer return of interest today thanks to competition within the savings market over the past 12 months. Still, not one easy access or notice account on the market can beat 2.1%, the current level of inflation.

“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.

“This month savers will once again find the top fixed bond rates are available from the more unfamiliar brands, such as with Islamic banks, with it possible to find several short-term accounts that match or beat the current inflation rate. A year ago however, savers wouldn’t have been able to find any 12-month fixed bonds paying in excess of 2.1% and would instead have had to tie in their cash for two years or more, while in 2017 they would have had to tie up their funds for at least five years to beat 2.1% – a stark difference to today.

“Despite this improvement, savers who want instant access to their cash may still be disappointed, as there are still no easy access accounts that can outpace the rate of inflation. Regardless, the recent spate of competition from providers looking to retain a prominent place in the market means savers will find better returns available.

“It remains to be the case that savers will need to look towards the challenger brands for the top rates, so as long as the provider has the same 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.

moneyfacts.co.uk is a financial product price comparison site, launched in 2000, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, there is no commercial influence on the way moneyfacts.co.uk ranks products, showing consumers a true picture of the best products based on the criteria they select. The site also provides informative guides and covers the latest consumer finance news, as well as offering a weekly newsletter.

MoneyFacts Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in