Even with inflation falling, low saving rates mean you’re losing out in real terms. So what can you do? Here are my top places to put your cash to make as much as 5%.

When prices for goods and services are on the up it’s called inflation, and the inflation rate is just the average of those increases. But if your income – whether from a salary or savings isn’t keeping up with that rate, then the cost of living is going to be more expensive.

Last month the inflation rate hit a three year low of 1.7%, yet even the best standard savings accounts and ISAs offer around 1.45%, meaning your money held in these accounts is actually losing value! Last year’s interest rate rise has helped boost those a little, but still not enough to be on par or beat the rate of inflation.

New savings accounts such as the one from Marcus at 1.45% is better than most places but even that fell by 0.05% – perhaps a sign that others will follow.

And high interest in current accounts have fallen too. In June Tesco Bank cut from 3% to 1%, followed in July by TSB cutting from 5% to 3%. Nationwide also closed its 5% regular saver.

Fortunately, there are a handful of places where you can beat 1.7%. Here are my picks of inflation-beating instant-access accounts for your cash savings.

5% interest on savings for all

This is the highest paying account, and you can access your money at any time. However the amount of money you can save in them is limited.

Nationwide FlexDirect Current Account

You can get 5% for one year on a balance up to £2,500 with the FlexDirect account. You do need to pay in £1,000 a month to get this rate. If you know anyone with this account already you can ask them to refer you, and you’ll both get a £100 bonus (If you know me personally I can share my link with you so just ask).

Afterwards it will drop to 1%, but you can always switch away when that happens and get a nice cash bonus for doing so.

3% interest for all

TSB Classic Plus

The TSB Classic Plus offers interest on far a lower balance – you get the 5% on just £1,500 – but there’s still the potential to get three if you and your partner have one each and open a joint account. You need to pay £500 into the account every month to get the interest.

5% interest if you have a current account with these banks

You can only open these Regular Savings accounts if you have or open a current account with these banks – but that’s no reason to put you off. There’s a limit to how much you can save each month, and the interest is calculated on the balance each month. After 12 months the interest is paid and your saver closed. But you can then open up another and begin again.

Sadly, this year we’ve seen decent paying options from Nationwide close, and the rate reduced at First Direct and HSBC.

Marks & Spencer Bank Monthly Saver – 5%

This is the third regular savings account. You’ll be able to save a maximum of £250 a month.

If you switch to M&S Bank you’ll get a £100 M&S gift card, and another £80 over the next year.

Santander Regular eSaver – 3%

If you have a Santander 123 account then you can 3% for its Regular eSaver account. The monthly maximum is £200.

But since there is a fee for that account, I wouldn’t open one to get access to the monthly saver. In fact, even if you do have one I think you’re probably better off moving your savings elsewhere and opening a Natwest Reward account for cashback on your bills.

> See my comparison between Santander and Natwest’s bill cashback accounts

Regular Savers open to all

Virgin Money – 3%

You don’t need a Virgin Money current account to get this one at 3% for one year. Max deposit of £250 a month. Unlike many of the others you can also withdraw money as often as you want without a penalty. You do have to open it up in branch.

Other savings accounts

The above accounts all have caps on how much you can save, so what should you do with any additional money. Well if you want easy access you won’t beat inflation, but you will probably beat rates from most other providers.

Marcus – 1.45%

This account from Marcus by Goldman Sachs recently dropped from 1.5% to 1.45%, and could well drop further. Only 0.10% is guaranteed for one year, so the rest could drop at any time.

Check out all the latest banking deals:

The best bank switching, cashback and interest offers (October 2019)

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