The best high interest current accounts to beat inflation

Grow your savings: high interest current accounts pay much higher rates than most savings accounts

Despite the increase in last week's base rate, savings rates are still lagging behind and, unfortunately, it is unlikely that this will change in a hurry.

Judging from past behavior, most banks will not approve the full 0.25 percent increase to savers with no interest hunger at all, despite jumping in the possibility of raising their mortgage rates.

According to figures from Moneyfacts.co.uk, even if the street banks increase their rates by 0.25 percent, few of their easily accessible accounts would pay enough to equal the base rate of 0.75 percent. .

Grow your savings: high interest current accounts pay much higher rates than most savings accounts

Grow your savings: high interest current accounts pay much higher rates than most savings accounts

In addition, there are only a handful of savings offers that currently offer real gains. In fact, to beat inflation, 2.4 percent, savers must commit their cash for five years.

Our most important advice to save money this week, therefore, is to get rid of the miserable fees in easily accessible savings accounts and consider a checking account that pays interest that will exceed both the base rate and inflation.

The main high interest current account offers

The best offer in the market is Direct Direct from Nationwide that pays 5 percent up to £ 2,500. After one year, the rate falls to 1 percent, so you will have to move your cash back to continue obtaining yields that inflate inflation.

The construction company also has a FlexPlus account that pays 3% lower at £ 2,500, but the interest is ongoing. It will not be worth opening simply for the interest that is offered, since the account has a monthly fee of £ 13, but it is one of our favorite packaged bank accounts.

Tesco Bank pays 3 percent up to £ 3,000, guaranteed until April next year. You must have at least three direct debits per month configured and deposit £ 750 per month.

Another advantage is that it offers additional rewards for the expense.

A feasible cost of £ 400 per month in food purchases plus £ 500 spent elsewhere would cost £ 102 in Clubcard points in a year.

These can be redeemed for vouchers to spend elsewhere, worth up to three times more, or can even be exchanged for the BA Executive Avios. £ 102 worth a whopping 24,480 in airline miles.

It will not exceed inflation, but Santander Account 123 still exceeds easy access savings rates at this time and is the best option for savers with larger pots.

Pay 1.5 percent on up to £ 20,000, plus you receive up to 3 percent money back on home bills paid from the account. However, it comes with a monthly fee of £ 5.

TSB also offers a decent credit interest rate of 5 percent on the first £ 1,500 for customers with their Classic Plus account. However, considering its catastrophic IT crisis earlier this year, it is unlikely to be enough to win new clients.

Two smart trips to increase profits

The most lucrative credit interest accounts unfortunately limit the balance in which you can earn interest, which means that only the smallest pots benefit from the savings rates.

However, there are a couple of ingenious ways around this.

Most accounts allow you to open a personal account plus a joint account, which means that a couple can have three accounts between them.

Using the Tesco Bank account, for example, means you can earn 3 percent on up to £ 9,000. Nationwide has the same policy, so it's £ 7,500 earning 5 percent interest.

However, the accounts make you jump for some hoops. You should make sure to keep the minimum deposit and direct debit requirements to keep earning interest.

If you really want to play in the system, you can open multiple accounts of high interest accounts with different banks.

If you maximize them, it is possible with careful planning and then complete your income through each one each month to meet the minimum deposit requirements.

The best way to do this is to establish permanent orders between your accounts.

What happens with a regular savings account?

Regular savings accounts also pay a striking interest of up to 5 percent.

Unfortunately, the way these accounts work, which allows you to add a limited amount each month, means you will not benefit from inflated inflation rates throughout the lot until the last month.

However, they still offer savers higher returns than the average savings account.

Leaving £ 250 per month in an account that pays 5 percent would generate £ 81.25 in interest, which is equivalent to a 2.7 percent rate on the full balance of £ 3,000 in an account for one year.

However, remember that most accounts will not allow you to skip monthly deposits and will not be able to access your cash until the end of the term, or you will lose interest.

Customer service favorite, First Direct, Regular Saver, attached to your 1st Account, pays 5 percent and allows deposits of up to £ 300 per month.

Nationwide also pays 5 percent to customers on its Flex Regular Online Saver. It also allows savers to save up to £ 250 per month.

HSBC also pays 5 percent and allows monthly deposits of up to £ 250. But you must hold an Advance or Premier account to qualify. These accounts have large balance requirements, so they will not be for everyone.

M & S Bank pays 5 percent of the savings that can be reloaded up to £ 250 per month. The account is reserved for existing customers, but the current account might be worth moving to banks, since it pays £ 125 in vouchers when you register plus a surcharge of £ 5 per month for a year. It also offers an interest-free overdraft of £ 100.

Santander's Estaver regular offers 3 percent at up to £ 200 per month and Lloyds offers the same rate at a monthly balance greater than £ 400. Alternatively, TSB customers get 2% of a monthly deposit of £ 250.

THIS IS THE MONEY YOU SHOULD READ GUIDES FOR THIS WEEK

THIS IS THE FIVE OF THE BEST CURRENT ACCOUNTS IN MONEY

The index was a smart move?

Some have been asking for an increase in the rate for a long time, while others believe that we should try to get back to normal before the recession comes.

But those who oppose believe that even this small change to a very low base level of 0.75 percent is a bet too far from the Bank of England.

In this podcast, Simon Lambert, Lee Boyce and Georgie Frost are submerged in the rate increase.

Why the bank raised rates, who will it affect, why interest rates even go up and down, and how did they end up at 0.5% in the first place?

More importantly, how high will they go now and how fast?

Press play up or listen (and subscribe if you like the podcast) in Apple, Acast, Spotify and Audioboom Podcasts, or visit our This is Money podcasts page.

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