Rise in inflation leads to a higher number of underperforming savings accounts

Savers should reconsider the rates on their savings accounts after a rise in inflation means that many are now underperforming. 

The latest data suggests that the number of savings accounts beating inflation has tumbled from 110 to just 58.

This is the result of a slight rise in the Consumer Price Index which went up to 2.1 per cent in July – up from two per cent in the previous month.

Some experts have suggested that savers should now look to fix their savings accounts for at least 18 months to beat inflation in the mainstream market.

Research indicates that the best 18-month bond is currently offered by the Bank of London and the Middle East (BLME) which pays 2.25 per cent. 

This is an Islamic bank that does not offer an interest rate due to its beliefs but instead offers an “expected profit rate”.

Savers are being encouraged to review their current savings to see whether a switch is necessary and seek professional independent advice to make the most of the money they hold. 

Link: Inflation and price indices