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Inflation-busting savings accounts: where can you earn up to 5%?
The number of deals that can beat May's CPI figure of 3.4% has fallen
Three in 10 savings accounts offer returns below May's inflation rate of 3.4%, meaning money invested in one of these products is losing value over time.
A Which? analysis found that just 72% of UK savings accounts beat May’s inflation rate of 3.4% — down from 73% last month and 88% in January.
Read on to find out which accounts offer the best interest and what's behind the latest Office for National Statistics (ONS) inflation figures.
Which savings accounts beat inflation?
Our analysis of Moneyfacts data shows there are currently 1,614 savings accounts (72% of all products) that offer rates higher than May's CPI inflation rate of 3.4%. This includes instant-access and variable-rate deals, fixed-rate bonds and Isas.
This table shows the top rates currently available on instant access and fixed-rate cash Isas and savings accounts, ordered by term.
| Instant access | Cahoot | 5% | 61% | £1 | Internet | Monthly, yearly |
| Instant access cash Isa | Tembo Money | 4.8% | n/a | £10 | Mobile app | Monthly |
| One-year fixed rate | Cynergy Bank | 4.5% | n/a | £1,000 | Internet | On maturity |
| One-year fixed rate cash Isa | Castle Trust Bank | 4.27% | n/a | £1,000 | Internet, telephone | On maturity |
| Two-year fixed rate | JN Bank | 4.42% | n/a | £100 | Internet | Yearly |
| Two-year fixed rate cash Isa | United Trust Bank | 4.21% | n/a | £5,000 | Internet | Anniversary |
| Three-year fixed rate | JN Bank | 4.45% | n/a | £100 | Internet | Yearly |
Table notes: rates sourced from Moneyfacts on 18 June 2025. Provider customer score is based on savers' overall satisfaction with the brand and how likely they are to recommend it to others. n/a means sample size was too small for us to generate a provider score (a) Offers 5% AER up to £3,000
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Compare and chooseHow savings rates track against inflation
It's important to choose an account with a rate above the current CPI figure. If the interest rate on your account is below inflation, your savings will effectively lose value over time.
This table shows how average savings rates compare to inflation since August 2020, using data from Moneyfacts:
The average rates on one-year and longer-term bonds have beaten inflation since October 2023.
May's average instant-access rate of 2.78% AER, however, is significantly lower than the pace at which prices are rising.
The last time it dipped below inflation was in January 2025, but the gap was much smaller.
- Find out more: best savings accounts 2025
What's happening to savings rates?
Savings rates rocketed after the Bank of England (BoE) increased the base rate 14 times between December 2021 and August 2023. But when the base rate was reduced last August, average savings rates began to drop too. The BoE has cut the base rate three times since then, falling to a two-year low of 4.25% on 8 May.
Instant-access rates, which pay variable rates and can be changed at short notice, have seen the biggest cuts. The average rate has now fallen from 3.11% AER to 2.78% over the past year.
There are still a handful of deals offering 5% AER, but they're often limited to existing customers or come with restrictions on how often you can withdraw.
Locking your money away for a year or more could help protect it if savings rates continue to fall. That's because they guarantee that your rate won't drop during the term.
At the moment, rates are similar across fixed bonds regardless of length, ranging from 4.42% to 4.45% AER. But fixing for two to five years could still leave you better off in the long run. If you only fix for 12 months or less, you may face lower rates when it's time to reinvest.
Cash Isas, which allow you to save up to £20,000 tax-free annually, have also taken a hit. The average instant-access cash Isa rate has fallen from 4.16% to 3.9% AER over the past 12 months. Average fixed-term cash rates have dropped from 4.44% to 3.94% AER over the same time period.
The next base rate decision is due tomorrow (19 June), with further cuts expected over the coming year. This means savings rates may continue to drop.
- Find out more: savings accounts vs cash Isas
What's behind May's inflation rate?
The headline CPI rate for April 2025 was revised down from 3.5% to 3.4% by the ONS, and the figure remained at 3.4% for May, meaning there has been no change in the pace at which prices are rising.
Food prices were a major factor keeping inflation stubborn. They rose by 4.4% in the 12 months to May, up from 3.4% in April. This is the highest food inflation rate recorded since February, when it hit 5%.
Shoppers with a sweet tooth have been particularly affected. Our supermarket price tracker found that the price of chocolate rocketed by 17.5% in the year to May – the biggest increase across all food and drink categories. Prices also jumped for sugar, jam and syrups.
Furniture and household goods rose in price too, climbing 0.8% year-on-year – the highest rate since December 2023.
However, falling transport costs helped offset some of the increases. Air fares rose 5% between April and May 2025, compared with 14.9% between the same period last year. This is largely due to Easter school holidays falling in April this year.
- Find out more: what's happening to grocery costs at the supermarket?
