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Inflation drop widens savers’ options
Falling inflation means there are now 278 accounts that offer savers a real return on their money. Here are the top accounts...
by Victoria Bischoff on Jul 17, 2012 at 12:36
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Savers now have access to 278 inflation-beating accounts, up from just 210 last month.
A sharp fall in inflation in June to 2.4% – its lowest level since November 2009 – is ‘welcome’ news, said Sylvia Waycot of Moneyfacts, but is ‘not enough to relieve the general hardship and disappointment that continues to blight savers’.
The 278 accounts now available is a significant improvement compared to last year when not one savings account paid savers a real return on their money, but this is still just 278 out of a total 1,122 – 156 of which are tax efficient ISAs which limit the amount you can invest in cash to £5, 640 a year.
There are only 122 non-ISA accounts that beat inflation, though these include notice and notice accounts for the first time this year, said Moneyfacts.
To beat inflation a basic rate taxpayer paying income tax at 20% needs to earn at least 3% a year in interest, while at 40% a higher rate taxpayer needs an account paying 4%.
Here Moneyfacts reveals the top inflation beating accounts for basic rate and higher rate taxpayers.
Basic rate taxpayers: cash ISAs
| Company | Account | Rate |
|---|---|---|
| Santander | Direct ISA Issue 9 | 3.30% |
| Coventry Building Society | 60 Day Notice ISA | 3.25% |
| Aldermore | 60 Day Notice Cash ISA | 3.15% |
| Manchester Building Society | Platinum Instant ISA Issue 1 | 3.06% |
| Post Office® | Premier Cash ISA | 3.01% |
| M&S Money | Advantage Cash ISA | 3.00% |
| Market Harborough Building Society | Flexible ISA | 3.00% |
| Teachers Building Society | Cash ISA Reward | 3.00% |
| Cheshire Building Society | Direct Cash ISA (Issue 4) | 3.00% |
| ING Direct | ING Direct Cash ISA | 2.96% |
Fixed rate cash ISAs
| Company | Account | Rate |
|---|---|---|
| Halifax | ISA Saver Fixed | 4.15% |
| Halifax | ISA Saver Fixed | 4.10% |
| Governor Money | Clydesdale Bank - 5 Year Fixed Rate ISA | 4.05% |
| BM Savings | 5 Year Fixed Rate ISA | 4.05% |
| Santander | 2 Year Fixed Rate Major ISA | 4.00% |
| Julian Hodge Bank | 5 Year Fixed ISA | 4.00% |
| Julian Hodge Bank | 5 Year Fixed ISA | 4.00% |
| Wesleyan Bank | Internet Fixed Rate Cash ISA | 4.00% |
| Cheltenham & Gloucester | 5 Year Fixed Rate Cash ISA | 4.00% |
| Cheltenham & Gloucester | 4 Year Fixed Rate Cash ISA | 3.80% |
Fixed rate accounts
| Company | Account | Rate |
|---|---|---|
| Secure Trust Bank | Fixed Rate Bond 4 Year Term (Series 9) | 4.21% |
| BM Savings | 5 Year Fixed Rate | 4.20% |
| Vanquis Bank | Vanquis Bank High Yield | 4.06% |
| Secure Trust Bank | Fixed Rate Bond 3 Year Term (Series 5) | 4.01% |
| SAGA | 3 Year Fixed Rate Savings | 4.00% |
| Halifax | Fixed Online Saver | 4.00% |
| The Co-operative Bank | Fixed Term Deposit | 4.00% |
| Britannia | 3 Year Fixed Rate Bond Issue 43 | 4.00% |
| Halifax | Fixed Saver | 4.00% |
| BM Savings | 4 Year Fixed Rate | 4.00% |
No notice accounts
| Company | Account | Rate |
|---|---|---|
| Coventry Building Society | Telephone Saver | 3.25% |
| krbs | Direct Savings Account | 3.20% |
| Santander | eSaver Issue 5 | 3.20% |
| ING Direct | Savings Account | 3.19% |
| Derbyshire Building Society | Derbyshire NetSaver Issue 3 | 3.06% |
| GE Capital Direct | GE Bonus Saver Issue 2 | 3.06% |
| Nationwide Building Society | MySave Online Plus | 3.02% |
| Allied Irish Bank (GB) | Easy Access Reward Account | 3.00% |
| Coventry Building Society | Family Saver | 3.00% |
Notice accounts
| Company | Account | Rate |
|---|---|---|
| Manchester Building Society | Platinum Notice Issue 3 | 3.36% |
| krbs | Internet 60 Day Notice Issue 2 | 3.35% |
| Shawbrook Bank | 120 Day Notice Personal Savings Account Issue 2 | 3.30% |
| krbs | Postal 60 Day Notice Issue 2 | 3.25% |
| Aldermore | 120 Day Notice | 3.20% |
| Shawbrook Bank | 95 Day Notice Personal Savings Account Issue 2 | 3.20% |
| Manchester Building Society | Platinum Notice Issue 2 | 3.16% |
| Aldermore | 90 Day Notice | 3.10% |
| Melton Mowbray Building Society | Online 100 Day Notice | 3.10% |
| Post Office® | Reward Saver | 3.00% |
Higher rate taxpayers: fixed rate accounts
| Company | Account | Rate |
|---|---|---|
| Secure Trust Bank | Fixed Rate Bond 4 Year Term (Series 9) | 4.21% |
| BM Savings | 5 Year Fixed Rate | 4.20% |
| Vanquis Bank | Vanquis Bank High Yield | 4.06% |
| Secure Trust Bank | Fixed Rate Bond 3 Year Term (Series 5) | 4.01% |
More about this:
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- Summer sales and cheaper fuel drag down UK inflation
- The 210 savings accounts that beat inflation
- The Lolly guide to ISAs
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by Michelle McGagh on May 20, 2013 at 09:59
2 comments so far. Why not have your say?
Chuck
Jul 17, 2012 at 16:59
You will be an idiot to save via cash. Throughout 2008 to 2012, the government and Bank of England have shown they will destroy your prudent savings to bailout the foolish and greedy. As a saver, is your memory really that short?
I just wish I wasn't the fool to think that an idependant Bank of England will stick to their task and keep inflation within target.
report thisMark22
Jul 18, 2012 at 08:26
Come on Citywire, this is cheap and pointless jounalism. The inflation rate quoted is backward looking and only 12 months. The interest rates you have quoted are forward looking and (in many cases) more than 12 months. So your article is meaningless and just designed to fill column inches. More difficult journalism would have been to work out which accounts available 12 months, 2 years, etc. ago would have beaten inflation for tax payers of different rates and to see whether there is a pattern ( i.e. good cash companies and bad cash companies).
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