With the latest news from the Office of National Statistics inflation has increased to around 3% in December. But does this mean that savers can wave goodbye to any chance of getting any real interest on their cash? Put another way does this mean that any savings you have are being eroded due to poor interest rates?

A simple scan of the internet will reveal that most instant access savings account are giving you less interest than the current rate of inflation. In addition, most Cash ISA’s interest rates either match the current rate of inflation or in fact are below it. So the simple answer is, if you are looking for a degree of flexibility with your savings then you are unlikely to get a good deal.

According to Moneyfacts, a basic rate-taxpayer has to earn approximately 3.6% in order to cross the threshold and start to earn some real interest, while higher rate-taxpayers have to earn 4.81%. However, with instant access savings rates the way they are, people stand to lose a fair bit on their savings.

So what can one do to ensure that they are making their money work for them? Well, the best advice is to shop around to ensure that you are getting the best deal on the market. Alternatively, if you wouldn’t mind considering tying your money away for a while then a number of organisations are offering bonds which may offer you a higher rate of interest than a conventional savings account. However, bonds come with a higher risk and therefore one should fully investigate the implications before investing in any form of savings vehicle.