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19 Aug 2026

Inflation-busting savings accounts: where can you earn up to 5%?

July's CPI rate rose to 2.9%. What savings deals can beat it?

Matthew JenkinSenior writer

Matthew is an award-winning journalist, specialising in savings, tax and insurance.

Ruby FlanaganSenior Content Producer

With a background in financial journalism across national titles, Ruby loves helping people take control of their money and specialises in pensions, tax, banking and benefits.

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The share of savings deals that beat inflation dropped to 79% after July’s Consumer Price Index (CPI) climbed to 2.9%.

That's slightly lower than last month, when our analysis found that 82% of savings accounts paid interest above inflation.

If your cash is in an account paying less than July's 2.9% inflation rate, it's effectively losing value over time, as prices increase faster than the value of your savings.

Here, we look at which accounts pay the most interest and what's happening to savings rates.

Which savings accounts beat inflation?

Our analysis of Moneyfacts data shows that 2,067 savings accounts – 79% of all products – pay rates higher than July's 2.9% inflation rate. This includes variable-rate deals, fixed-rate bonds and cash Isas. That's down from 82% last month.

Variable-rate products – such as instant-access accounts – have the worst rates overall, with 59% of deals beating inflation.

The lion's share of inflation-busting deals are fixed-rate bonds, with 99% paying more than July's inflation rate. For cash Isas, it's 80%.

The table shows the top rates available for instant-access, fixed-rate and cash Isa savings accounts, ordered by term.


Instant access	Cahoot	Cahoot Sunny Day Saver	5% (a)	n/a	£1	Internet	Monthly, yearly
Instant access cash Isa	Sidekick	Cash Isa	4.61% (b)	n/a	£1	Mobile app	Monthly
One-year fixed rate	MBNA	Fixed Saver 1 Year	4.85%	n/a	£1,000	Internet	On maturity
One-year fixed rate cash Isa	Castle Trust Bank	Fixed Rate e-Cash Isa	4.70%	n/a	£1,000	Internet, mobile app	On maturity
Two-year fixed rate	Birmingham Bank	2 Year Fixed Rate Bond	4.87%	n/a	£5,000	Internet	Yearly
Two-year fixed rate cash Isa	Vida Savings	2 Year Fixed Rate Isa	4.77%	n/a	£1,000	Internet	Monthly, anniversary
Three-year fixed rate	Afin Bank	3-Year Fixed Term Account	5%	n/a	£1,000	Mobile app	Yearly
Three-year fixed rate cash Isa	Vida Savings	3 Year Fixed Rate Isa	4.80%	n/a	£1,000	Internet	Monthly, anniversary
Four-year fixed rate	RECOMMENDED PROVIDER Aldermore	4 Year Fixed Rate Savings Account	4.61%	74%	£1,000	Internet	Monthly, yearly
Four-year fixed rate cash Isa	UBL UK	4 Year Fixed Rate Cash Isa	3.91%	n/a	£2,000	Branch, internet, mobile app, postal	Monthly, quarterly, anniversary, on maturity
Five-year fixed rate	Afin Bank	5-Year Fixed Term Account	5%	n/a	£1,000	Mobile app	Yearly
Five-year fixed rate Isa	Vida Savings	5 Year Fixed Rate Isa	4.85%	n/a	£1,000	Internet	Monthly, anniversary

Table notes: rates sourced from Moneyfacts on 19 August 2026 and based on a balance of £5,000. (a) The Sunny Day Saver account offers 5% AER on balances up to £3,000 for 12 months, after which funds transfer to a Cahoot Savings account at 1%. (b) Includes a 1.38% bonus rate for the first 6 months.

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How savings rates track against inflation

If your rate is lower than inflation, your savings will lose value in real terms, so it's important to pick a savings account with an interest rate above the current CPI figure.

The graph shows how average savings rates compare with inflation since August 2020, using data from Moneyfacts:

The average rates for one-year and longer-term fixed bonds in July stood at 4.22% AER and 4.24%, respectively. Last month's average instant-access rate was 2.53%.

Find out more: Best savings accounts 2026

What's happening to savings rates?

Savings rates have been declining since the Bank of England cut the base rate in August 2024, and it's fallen six times since then. It is currently held at 3.75%.

Changes to the base rate are important because banks typically respond to a cut by reducing the interest paid on savings accounts. But while savings rates had been steadily dropping for months, they are now climbing again.

That may be partly in response to providers second-guessing the impact the Middle East war will have on the UK economy.

Instant-access

Moneyfacts data shows a rise in interest offered by instant-access accounts, which pay variable rates and can be changed at short notice. The average instant-access rate was 2.53% on 1 August 2026 – the same as last month.

There are now several instant-access deals offering rates as high as 5% AER. However, all of the top deals come with significant strings attached, such as balance limits, restrictions on who can open, offering temporary introductory rates, or imposing withdrawal limits.

The top deal for an instant-access account without restrictions or a bonus rate is Cahoot's Simple Saver, paying 4.52% AER.

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.

Rates also ticked up between July and August 2026. The average one-year rate rose from 4.22% AER to 4.23%. Rates for an account lasting more than 12 months also rose from 4.24% to 4.25%.

There is currently little difference between returns offered by short and long-term bonds. For example, MBNA's one-year deal pays a fraction more than Afin Bank's five-year account – 4.85% compared to 5%.

Cash Isas

Cash Isas allow you to save up to £20,000 tax-free annually. Rates across all types of cash Isa saw increases in August.

The average rate for instant-access cash Isas stayed the same at 2.72%, but the average one-year fixed Isa climbed from 4.21% to 4.24%. Rates for Isas lasting more than 12 months rose from 4.22% to 4.27%.