"Savers are clearly running out of options for an inflation-beating return, unless they lock their cash away for the long term or are prepared to place their funds in more riskier investments."
The Moneyfacts research recorded 67 savings rate rises and 53 reductions. However, some of the reduced deals fell by as much as 0.60%.
Additionally, new deals launched since the start of the year outweigh withdrawals at 49 new savings accounts versus 31 withdrawals.
Today, only 23 of 697 savings accounts currently on the market can beat or match inflation, which rose to 1.80% in January.
Rachel Springall, Finance Expert at Moneyfacts, said: “The surprise of rate rises and new deals outweighing cuts and withdrawals sounds all too good to be true, but that’s exactly what’s occurred since the start of 2017. However, it’s much too early to start celebrating a revival in the market, because rates are still extremely low compared to years gone by.
“Most of the new deals that have surfaced this year pay rates that are below the current level of inflation, but they can still earn a position among the best accounts – showing that providers don’t need to work very hard to maintain a competitive position in the Best Buys.
“Savers are clearly running out of options for an inflation-beating return, unless they lock their cash away for the long term or are prepared to place their funds in more riskier investments. A year ago savers had 118 fixed deals on the market to choose from that paid a respectable 2% or more, but this has eroded to just 11 accounts – all of which require savers to tie their cash in for five years or more.
“Despite the huge cuts over the past few years, savers might still be clinging onto the hope that the market can recover, but they would do well not to hold their breath in anticipation. Until competition heats up, savers must make do with the NS&I bond in the Spring, expected to pay 2.20% for three years, and the rise of the ISA tax-free allowance to £20,000 from April.”
