Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“The level of inflation should not deter savers from comparing deals and switching, as there have been a few improvements to the top rate deals in the market over the past month. However, the stark reality is that inflation depreciates the true spending power of cash, and it has now been two years since any standard savings accounts could beat it. In May 2021 inflation was 1.5% but the interest rates on offer on standard savings accounts could not outpace it. Over the past two years, savings rates have improved but inflation has risen to such a prominent level that savers’ cash is being eroded in real terms. It is expected inflation will come down, with the latest predictions for Q2 2024 to be 3.4%, but this is still above the 2% target.

“There have been a few notable areas within the savings market to see positive uplifts, which may please consumers who want flexibility with their cash or those who are only prepared to lock their money away over the shorter-term. Easy access accounts, notice accounts and one-year fixed bonds have improved, thanks to a combination of the Bank of England base rate rises and provider competition. Those savers comparing their existing accounts may be wise to switch, as they could earn more interest in the process. A similar picture can be seen across ISAs, which is good news for those who have not yet taken advantage of their ISA allowance.

“The current sentiment within the savings market is leaning towards more interest rate rises, but it will be interesting to see whether fixed rate bonds will see more improvements over the next few days, or if deals get pulled when providers meet their desired funding targets. Savers will need to keep on top of the changing market if they want to secure a competitive deal.”

*Data note: Please note that these savings product numbers only include deals that are available to UK residents (easy access, notice, fixed rate bonds, variable or fixed ISAs) and exclude regular savers and children’s savers (this figure does not count each interest payment option for each account), based on a £10,000 deposit. Higher rates may be available for other levels of deposit.