Are YOU missing out on inflation-busting bank accounts with a massive 7% interest rate? Here’s our pick of the best

SAVERS who leave their money languishing in a current account or an old savings deal could be missing out on hundreds of pounds a year in interest. With banks and building societies battling to attract new customers, you could be earning up to 7 per cent on your cash, boosting your savings pot with an easy switch. Keeping your cash in a low interest savings account means your money is actually losing value Credit: Getty Rising costs push up inflation and means your cash needs a boost to keep up with prices Credit: Getty Inflation currently stands at 2.6 per cent, while the Bank of England‘s base rate – which influences interest rates – stands at 3.75 per cent. But many banks are offering rates much higher than this. The latest figures from Moneyfacts show savers can get rates more than double the current rate of inflation. Any money in a savings account paying less than inflation is effectively losing value in real terms, because the cost of goods and services is rising faster than your money is growing. For example, if inflation is 2.6 per cent but your savings account pays just 1 per cent – a typical rate for many high street banks’ savings accounts – your cash is still growing on paper, but the amount you can buy with it is shrinking. And economists expect the rate of inflation to rise when new figures come out on Wednesday, putting your cash at even more risk. That’s why it’s important to regularly check your interest rate and switch to a better deal if you are being short-changed. Here we take you through the top savings deals on offer so you can get more from your cash. The top regular savings accounts A lot of major banks pay low rates on regular savings accounts Credit: Getty Many banks offer paltry rates on their standard savings accounts, but some providers are offering much more competitive deals to lure in new customers. Co-op Bank’s Regular Saver currently pays 7 per cent interest over a 12-month term. The account can be opened with £1 and lets customers save up to £250 a month. There is no minimum monthly deposit, and withdrawals are allowed. However, the account is only available to existing Co-operative Bank current account customers, so you also need to open a current account. As you can only pay in up to £250 a month it might not be best for savers with large lump sums, but it could be useful if you want to build up a pot gradually. If you deposited £250 a month for the full year you would end up with £3,116 – £3,000 of your own money and £116 in earned interest. Another easy access account currently offering 5 per cent is the Spring Accelerate Saver account. Spring is a savings provider that is part of Paragon Bank, and the account can be opened through its app. Savers can earn 5 per cent interest on savings between £10 and £5,000, with interest paid monthly. If you paid in £100 a month for a year you would have a total of £1,233 saved with £1,200 of your money and £33 from interest. Easy access accounts are useful because they usually let you withdraw money when you need it, making them a good home for emergency savings. But bear in mind that these rates are variable, so providers can cut them at any time. Another top easy access deal is Tembo Money’s HomeSaver, which pays 4.55 per cent interest – and you can get an extra 1 per cent bonus rate if you’re a mortgage customer. The account can be opened with £10 and allows savers to add to and withdraw from their pot without penalty or restriction. If you put £100 a month into this account for one year at 4.55 per cent, you’d save £1,200 of your own money and earn roughly £29.58 in interest. However, the 4.55 per cent rate includes a 1.55 per cent bonus for 12 months, so savers should make a note of when this ends and be ready to move their cash if the return drops. Cynergy Bank’s Online Easy Access Account Issue 100 also pays 4.55 per cent AER. It can be opened online with just £1 and allows unlimited penalty-free withdrawals and further contributions using a nominated account. Again, the headline rate includes a bonus, this time worth 2 per cent for 12 months. Fixed-rate accounts Fixed-rate accounts pay more interest over time but you can’t take your cash out Credit: Getty For savers who don’t need immediate access to their money, a fixed-rate account may offer a more certain return. These accounts usually require you to lock your cash away for a set period, such as one, two, three or five years. In return, you get a guaranteed rate for the term, which can be useful if interest rates fall in future as your rate is locked in. But the downside is that you usually cannot get your money out early, so fixed-rate bonds are not suitable if you might need the cash. Ecology Building Society has just launched a new account, the Ecology Regular Saver, which pays 6 per cent interest for 12 months on deposits of up to £200 a month – good for anyone building up a savings habit. Customers making use of the max regular deposit could find themselves with £2,400 savings by the time the term ends, with £79 in interest. Moneyfacts says the top one-year fixed bond currently pays 4.85 per cent interest and is offered by three providers – GB Bank, MBNA and Vanquis Bank. However, they all require savers to deposit £1,000 when they open them so it may not be for you if you do not have a lump sum saved already. Longer fixes can pay even more. Investec Save currently tops Moneyfacts’ three-year bond chart with a Fixed Rate Saver paying 5 per cent interest. Caitlyn Eastell, personal finance analyst at Moneyfacts, said: “Fixed-rate savers may be able to lock in some of the strongest returns seen in years, with average long-term ISA and non-ISA rates hitting their highest levels since January 2024. “Longer-term rates have consistently remained higher than their one-year equals. This could be a valuable opportunity for savers who can afford to leave their money untouched to secure a competitive return.” However, locking in for longer is a bigger commitment. If rates rise, you could be stuck earning less than newer deals – and if you need the money unexpectedly, you may not be able to access it. Should you use a cash ISA? Cash ISAs let you earn interest without paying tax Credit: Getty Savers should also consider whether a cash ISA could be better than a regular savings account. ISAs allow you to earn interest tax-free – so if you have larger savings these could be suitable. Basic-rate taxpayers can earn up to £1,000 in savings interest each tax year before paying tax regardless of what account their money is in, while higher-rate taxpayers get a £500 allowance. But all interest earned inside a cash ISA is tax-free, and adults can currently put up to £20,000 into ISAs in the current tax year – although the allowance is reducing to £12,000 for under-65s from next year. The top easy-access cash ISA rate is currently 4.61 per cent with Sidekick – although that reverts to 3.23 per cent after six months. If you saved £100 a month for six months in a 4.61 per cent account from scratch, you’d save £600 of your own money and earn roughly £8 in interest. Progressive Building Society is also offering 4.60 per cent, while Trading 212 is offering 4.56 per cent. The best fixed-rate cash ISA is currently a five-year fix with Vida Savings at 4.85 per cent interest. That means you would keep that rate for the entire term. Someone saving £100 a month for five years at 4.85 per cent would put away £6,000 of their own money and earn around £783 in interest, taking their total pot to around £6,783. Before opening any savings account, check the minimum deposit, whether withdrawals are allowed and whether the headline rate includes a bonus. You should also ensure your money is covered by the Financial Services Compensation Scheme. The FSCS protects up to £120,000 per person, per authorised firm, so your money is safe if the firm goes bust. Interest rates can also change quickly, so it is worth checking comparison sites before applying. Switching from a poor-paying account to one of the top deals could help protect your money from being eaten away by rising prices.