Savers now have even less of an excuse to leave their money sitting in accounts paying paltry rates of interest. Data published today shows inflation fell to a two-year low of 1.8% in January, which means more than 200 accounts currently beat the inflation rate.
It’s a far cry from a year ago when inflation was 3% and not a single standard savings account could beat it.
Islamic bank BLME has hiked the rate on its one-year bond to 2.2%, taking it to the top of the best buy tables. Its nearest competitor Al Rayan, another Islamic bank, pays 2.17% on its 12-month bond.
To set-up a BLME account, savers will need a minimum of £1,000 and it can only be opened online.
Competition has been heating up in the short-term bond market, as economic uncertainties deter savers from locking their money away long-term.
The average rate on a one-year bond has risen from 1.19% to 1.48% over the past year, and savers can now get the same rate of interest on a one-year deal as they would have on a two-year bond in 2018, according to data firm Moneyfacts.
Rachel Springall, finance expert at Moneyfacts, said: “At the moment the top one-year bonds beat inflation. It is highly hoped that competition in the savings market will continue as providers tweak their rates to improve market position, and that can only be good news for savers during uncertain times.”
Source YourMoney