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Inflation-busting savings accounts: where can you earn up to 5%?
The number of deals that can beat July's CPI figure of 3.8% has fallen
More than half of savings accounts are now paying less than inflation – meaning money invested in one of these products is losing value over time.
Which? analysis shows that only 48% of UK savings accounts beat July’s inflation rate of 3.8%. That’s down from 65% in June and 88% at the start of the year.
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 that there are currently 1,093 savings accounts (48% of all products) that offer rates higher than July's Consumer Price Index (CPI) inflation rate of 3.8%. This includes instant-access and variable-rate deals, fixed-rate bonds and Isas.
This figure rises to 64% when analysing only fixed-rate accounts.
The table shows the top rates currently available for instant-access and fixed-rate cash Isas and savings accounts, ordered by term.
| Instant access | Cahoot | 5% (a) | 61% | £1 | Internet | Monthly, yearly |
| Instant access cash Isa | Chip | 4.7% (b) | n/a | £1 | Mobile app | Monthly |
| One-year fixed rate | JN Bank | 4.43% | n/a | £100 | Internet | Yearly |
| One-year fixed rate cash Isa | Shawbrook Bank | 4.31% | n/a | £1,000 | Internet | Monthly, on maturity |
| Two-year fixed rate | JN Bank | 4.45% | n/a | £100 | Internet | Yearly |
| Two-year fixed rate cash Isa | Shawbrook Bank | 4.21% | n/a | £1,000 | Internet | Monthly, anniversary |
| Three-year fixed rate | JN Bank | 4.45% | n/a | £100 | Internet | Yearly |
Table notes: rates sourced from Moneyfacts on 20 August 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 (b) Rate drops to 3.04% after three months
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Compare and chooseHow savings rates track against inflation
It's important to pick a savings account with an interest rate above the current CPI figure. If your rate is lower than inflation, your savings will lose value in real terms.
The graph shows how average savings rates compare with inflation since August 2020, using data from Moneyfacts:
The average rates of one-year and longer-term bonds have beaten inflation since October 2023. However, the gap is narrowing, with inflation just 0.11 percentage points below the average long-term savings account.
In contrast, the average rate of an instant access savings account has been below inflation since April. The average rate in July was 2.68%, just over a percentage point below inflation.
- 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 four times since then, reducing it to 4% on 7 August.
Instant access
Instant-access accounts, which pay variable rates and can be changed at short notice, have had the biggest cuts. The average rate fell from 3.1% AER to 2.64% in the 12 months to 19 August 2025. That's the lowest it's been in two years.
There is now only one instant-access deal offering a rate as high as 5% AER, the Cahoot Sunny Day Saver. Even better, the account has no restrictions on withdrawals or who can open it. The downside is that interest is given only on deposits up to £3,000, after which you earn no interest.
If you want instant access without restrictions, you'll have to settle for a lower top rate of 4.55% AER.
When searching for an instant-access account, watch out for introductory rates. We often see accounts with excellent initial rates that then drop after three or six months.
- Find out more: the different types of savings accounts explained
Fixed-term
Locking your money away for a year or more could help to protect it if savings rates continue to fall, as fixed-term accounts guarantee your rate won’t drop during the term.
One-year fixed rates have fallen this year. In January, you could secure a rate of 4.77%; now the top deals are marginally below 4.5%.
They have also fallen month-on-month. In July, you could secure a rate of 4.58%.
Five-year fixed-rate accounts have stayed very consistent this year, with market-leading deals typically above 4.5%.
Cash Isas
Cash Isas, which allow you to save up to £20,000 tax-free annually, have also taken a hit. The average rate of instant-access cash Isas slightly increased at the start of 2025, but has fallen since April.
Average rates of fixed-rate cash Isas fell dramatically between April and June, when President Trump announced his tariffs. This caused the market to price in additional base rate cuts to counter the potential of falling economic growth.
However, fixed rates have increased slightly since June, as the market now doesn't believe the Bank of England will make as many base rate cuts.
Instead, experts predict one further base rate cut in 2025, most likely in December.
- Find out more: best cash Isa rates 2025
Trains fares could rise by 5.8% in March
The retail price index (RPI) measures how the cost of goods and services changes over time. While CPI is the main inflation measure, RPI is still used for some household bills, such as mobile and broadband contracts, and it has also been used to set regulated rail fares.
RPI rose from 4.4% in June to 4.8% in July. If the government follows the same approach as in previous years, by adding one percentage point to July’s figure, regulated fares would rise by 5.8% next March.
However, ministers have not yet confirmed how the cap will be calculated for 2026.
What's behind July's inflation rate?
CPI inflation rose from 3.6% to 3.8% in the 12 months to July 2025 – the highest it has been since January 2024.
According to the ONS, the biggest driver of the rise 'was a hefty increase in air fares'. In fact, it is 'the largest July rise since collection of air fares changed from quarterly to monthly in 2001'.
Rising fuel costs played a minor role in the increase to inflation. The ONS found that between June and July, the average price of petrol rose by 2p per litre.
Food and soft drink prices also pushed inflation higher, rising by 4.9% in the 12 months to July – up from 4.5% in June. The uptick was primarily driven by price increases to coffee, fresh orange juice, meat and chocolate.
This marks the highest food inflation rate since February 2024, although it remains well below the peak of 19.2% recorded in early 2023.
- Find out more: what's happening to grocery costs at the supermarket?
