Savers seek high interest savings accounts to beat inflation
Savers will be happy to hear that official figures revealed UK inflation fell for the second month in a row in last month.
Those that are lucky enough to have some savings behind them have been given a much needed boost after the Office for National Statistics confirmed that Consumer Price Index inflation slowed to 3.2% in June, down from 3.4% from the previous month, which was mainly due to a fall in the cost of clothes and fuel.
According to Moneyfacts.co.uk, the falling rate now means a basic rate tax payer must find the best interest savings accounts in order to avoid their funds effectively being eroded by inflation. Studies show that to do so, savers must earn at least 4% from their account.
Those that are on the higher rate tax bracket are faced with the almost impossible task of finding an account that pays at least 5.33%.
The good news for basic rate tax payers is that there are currently 47 savings accounts available that can keep you from losing money.
The problem is that you will be extremely hard pushed to find instant access savings accounts that offer anything close to the minimum required rate, so making use of fixed rate bonds is your best chance.
One of the best savings accounts currently available pays above the rate required to break even. The ICICI fixed rate bond comes with a five year fixed term and pays an impressive 4.75%. You could also still earn a profit after inflation with the ICICI 4 year fixed rate bond offering a rate of 4.10%.
Sam Gooch, savings expert at Which4U said: "Once the Bank of England increases base rate the better savings rates will quickly become available across the board, something that we hope to see sooner rather than later."
Savers seek high interest savings accounts to beat inflation