Just three easy-access rates match inflation – and they come with a catch

Savers are running out of options, as there are now just three easy-access deals that keep pace with inflation.

Inflation hit 0.6pc in December – doubling from 0.3pc in November. But banks have been cutting their savings rates, meaning there are only three easy-access accounts that pay 0.6pc or more. However, two have restrictions on who can apply, meaning a very slim number of people will be able to access these rates.

The 21 Club account from Harpenden Building Society has an interest rate of 0.75pc but is only open to 18 to 21-yearolds. Furness Building Society’s student account also pays 0.75pc but only people in full-time education can apply.

The ICICI SuperSaver pays 0.6pc, matching inflation, but savers must open a HomeVantage current account with the bank before they apply. Last

January, eight easy-access accounts could beat inflation, which was 1.3pc.

Inflation, as measured by the consumer prices index, is expected to reach 2.1pc by the end of this year. There are no standard savings accounts currently able to beat this.

Rachel Springall, of data provider Moneyfacts, said: “As the economic outlook remains unpredictable and the Bank Rate stays at a historic low, it would not be too unsurprising to see further cuts as providers adjust their market position in response to an influx of cash into soughtafter deals.”

Savers who rely on interest from a fixed- rate bond or Isa will be disappointed, as the top deals have also deteriorated over the past 12 months, Ms Springall added. The best one- year fixed-rate bond rate has dropped from 1.8pc to 0.8pc. Savers moving from one deal to the other will find they will earn £200 less on a £20,000 pot over one year. The market-leading 0.8pc deal comes from Qatar Islamic Bank. Anna Bowes of Savings Champion, a comparison site, said competition was beginning to increase, which would hopefully cause rates to rise across the board: “New bonds have launched recently paying higher rates than their peers and long- term gilt [ government bond] yields have started to recover from a low point in the summer.” Ms Bowes said it was still important to switch. “The difference between having £50,000 in an account paying 0.01pc or 0.5pc means earning either £5 a year or £250.”