Savings account pays 9pc but there are a lot of strings attached

Savers can now earn 9pc in interest after the launch of the only savings account to beat inflation – but there’s a catch.

Saffron Building Society is offering an account with a market-leading 9pc interest rate. The current rate of inflation is 8.7pc.

The Members’ Month Loyalty Saver offers a fixed interest far ahead of the 4.5pc rate offered by the highest-paying easy-access account on the market.

But there are a series of stipulations that may give savers pause for thought.

First, though the account can be opened with a minimum deposit of £1, the maximum amount a saver can pay in over the term is £600 and monthly payments may not exceed £50. Any payment made over this limit will be returned automatically.

Savers who miss monthly payments will also lose their allowance for those months. Any unused allowance does not carry over.

“If you pay in the full monthly allowance and take money out within the same month, the money taken out cannot be replaced,” the conditions say.

After the 12-month deal is over, customers automatically revert to the bank’s Maturity Easy Access account, which has an interest rate of 1pc.

Based on a monthly payment of £ 50, while not withdrawing any funds, the balance after 12 months would be £ 629.25. This means that the most a saver could earn would be less than £ 30 over the duration of the fix.

What’s more, the account is only available to those who have been members of the mutual for a year or more.

Colin Field, Saffron’s chief executive

Officer, said the account was primarily aimed at “small savers”. Savings rates have been rising steadily as the Bank of England lifts its base rate to curb rampant inflation. Currently, the Bank Rate sits at 4.5pc, although analysts predict it could rise much further, which will be a boon for savers.

However, savers sticking with big banks could find themselves short-changed with rising rates not passed on, according to Which?. The consumer group found that customers with a £10,000 deposit could earn £ 312 more over a year if they switched to the market- leading easy- access account. The best such account currently is provided by Hanley Economic Building Society and pays 4.5pc.