Many best rates are easy access and notice options rather than ones that lock money away

This week’s news that inflation stayed steady at 4% in January means it is still possible to put your money in a savings account with an interest rate that beats the rising cost of living.

Returns on fixed-rate savings accounts have been falling, but, so far, variable rate deals have remained unchanged.

This has led to many best-buys being on easy access and notice accounts rather than those that lock your money away. However, these could be cut at any time and are likely to fall as soon as the Bank of England base rate does.

Rachel Springall from the financial information firm Moneyfacts says: “Savers who prefer to have flexibility will find that variable rates on the top easy access, notice accounts and Isa equivalents have been resilient.”

On Wednesday, Moneyfacts’ figures showed that on savings of £10,000, the highest rate available was 5.4% on Vanquis Bank’s 90-day notice account. You need £1,000 to open the online account and, as its name suggests, must request any withdrawals 90 days before you need the money.

Elsewhere, you can earn 5.21% on the best-buy one-year fixed-rate bond, by Smartsave. The online account is available for deposits between £10,000 and £85,000.

Breathing down its neck is Ulster Bank’s Loyalty Saver easy access account paying 5.20% on balances of £5,000 or more.

SmartSave looks the best bet, as that rate is guaranteed even if the base rate starts falling, while the others are subject to change.

On balances from £1, the best rate is 5.2% paid by Cahoot on its Sunny Day Saver. It’s a variable rate that just beats the 5.1% guaranteed on Hampshire Trust Bank’s one-year bond. Again, the difference is probably worth sacrificing for the potential long-term gain.

Springall says that six months after the most recent base rate rise, many providers have caught up and increased returns on variable-rate accounts.

“Any future improvements to the top rates will be down to competition,” she says.

The downward movement on fixed rates is because the money markets are already pricing in base rate cuts. Experts have predicted that these could start in spring as the Bank attempts to kickstart the economy.

Anna Bowes, a co-founder of Savings Champion, says we are in unusual position where the best fixed rates are available for the shortest terms.

“The inversion … is because we’re in a period of high rates expecting rate cuts going forward,” she says. But, she adds, the longer-term fixed rates may still pay off.

The savings platform Raisin has a five-year bond from ISbank that guarantees to pay 4.5% for the whole term. “In a couple of years you might be laughing – especially if inflation has dropped to 2%,” Bowes says.

Easy access and notice accounts typically have variable rates. Generally, these are not intrinsically linked to the base rate, Springall says, which means they could change at any time.

“Providers are more likely to change their variable rates in reaction to movements among their peers, and to manage the flow of deposits,” she says.

“So, despite many of the top easy access rates sitting on a par with some shorter-term fixed-rate bonds, these can change without much notice. Savers would be wise to keep this in mind if they prefer a fixed, guaranteed return.”

If you haven’t yet used your Isa allowance, providers are paying better rates than they were.

For taxpayers, this makes using the annual allowance – up to £20,000 depending on whether you have an investment version already this year – attractive.

Shawbrook Bank’s one-year fixed-rate cash Isa pays 4.98%. That’s lower than the equivalent account outside the Isa wrapper but the difference will be more than offset by the tax you will pay on the latter if you have used up your personal savings allowance.