The rising cost of living means that some people might think that inflation-linked savings accounts are a good idea, but there are catches, one expert has warned.
Rachel Thrussell, head of savings at Moneyfacts.co.uk, explained there are currently four such accounts on the market but these might not be the best bet for those looking for inflation-beating savings.
Two Leeds Building Society Accounts offer rates of 2.5 per cent above the retail price index, but this will be calculated and paid based on the rate on April 2009 and then April 2010.
By this time, inflation should have been brought under control, leading to lower returns, Ms Thrussell warned.
She said: "Although these products may seem a good deal at the moment, rates at a much higher level can be found elsewhere.
"Before opting for any savings product, make sure you are getting the best rate of return from one that suits your needs."
Yesterday, David Black, principal consultant of banking for Defaqto.com, advised people to check that their savings account remains competitive, especially if it had a introductory rate when they opened it.
Inflation linked savings accounts come with catches, expert warns
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Inflation linked savings accounts come with catches, expert warns
Fri, 20 Jun 2008
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