Top savings accounts that track base rate

Some savings accounts pay an interest rate directly linked to the bank base rate. But is there any point with a tracker savings account when base rate is at its record low?

You might be wondering what on Earth the point is of a savings account which tracks the base rate, given base rate is at its lowest level in the Bank of England's 300-year history.

However, some tracker savings accounts are paying pretty good rates over and above the base rate. And they come with the added bonus that if the Bank of England increases the interest rate at which high-street banks can borrow from it, you'll benefit from more interest yourself with none of the usual dawdling from the banks, and without the need to shop around again.

But how much do base-rate tracker savings accounts pay and how do they compare to other accounts?

I've been digging around for the best tracker accounts I can find. Here are the top five, but please leave a comment below for other readers if you think I've missed a good one:

Top five base-rate tracker savings accounts

*Also available as Cash ISAs.

**You have to open another Lloyds savings account simultaneously, if you don't already have one.

The interest rates above vary from 2.75% to 3.5%.

There's something for everyone here, with trackers lasting from one to three years and one of them with access in just seven days, which is close to easy access.

Like other savings accounts, they also vary in terms of access and withdrawal conditions.

Now let's compare those trackers with the closest equivalent, non-tracking savings accounts:

Best similar, non-tracking savings accounts

*This account is Sharia-compliant, which means the interest rate can't be guaranteed, but you'd normally still expect to receive this.

As you can see, the base-rate trackers come pretty close to their closest equivalent, non-tracking fixed-rate or easy-access accounts, paying just 0.25 to 0.5 percentage points less before tax.

I think the base-rate trackers are certainly something to consider if you want peace of mind for one year or more years, both in terms of getting a competitive rate today and protecting yourself from rises tomorrow, without having to shop around in between.

Having a good account only takes the edge off

Bear in mind that while these accounts might keep you competitive, none of them at today's rates will completely protect taxpayers from inflation. In other words, your savings are still losing value, but much more slowly than someone who doesn't shop around.

You'll need to look to top Cash ISAs to beat inflation, or you could hold out for inflation-beating savings accounts, which become available from time to time, but sell out quickly.

You could also consider lending your money to other individuals through peer-to-peer lenders like Zopa and Ratesetter. These reward you even more, but come with a little bit more risk.

More on savings accounts:

Easy access savings accounts drop interest rates by 60%

The best Cash ISAs right now

Treasury orders banks to offer simple savings accounts

The top inflation-beating savings accounts