Martin Lewis issued a ‘call to arms’ for everyone with a savings account during the latest edition of The Money Show Live this week, urging viewers to check their interest rate as a matter of urgency. The financial guru told STV viewers that easy access rates can now pay three per cent and there are even some fixed-rates offering an impressive seven per cent for one year.
His message was clear - anyone earning below 2.9 per cent on any money they have in a savings account needs to up it. He said: "Top savings interest rates have more than trebled in a year, yet most people are still being ripped off earning diddly squat and it’s even worse if you’ve got cash ISAs.”
Despite the cost of living crisis, the consumer champion highlighted how ‘millions’ of people have still got savings tucked away and need to maximise them. “So check what you’re earning now and let’s up it,” he advised.
Martin explained how savings rates have increased massively over recent months and how just two years ago, during the pandemic, all of them were below one per cent. Even a year ago, easy access rates were still below one per cent, but due to the recent massive base rate increases from the Bank of England - up from 0.25 per cent to 3.5 per cent - there are now savings rates of up to seven per cent on the market.
He said: “The most important thing that you need to understand is many of you still have savings at the lower level, even the average easy access rate is half what the top payers are and easy access is simple to move, so move.
“And you can earn even more in a fix.”
Martin also explained how inflation rates can impact savings rates.
He said: “Prices are rising way above the amount that you’re getting in interest in savings and what that means in real-terms, even the seven per cent savings account, is a ‘losings’ account because your money, while it is in savings, your purchasing power is decreasing because inflation is bigger than savings.”
But he warned this should not be interpreted as him saying there’s no point in maximising your interest.
He said: “It’s the opposite, it actually needs to be a ‘call to arms’ to all of you to say I need to get every single penny of interest I can to mitigate this inflation eating away army savings.
“It’s never been more important to maximise your savings rates.”
Martin then showed viewers a graph with the best savings rates on the markets right now, reminding them they should be earning a minimum of 2.9 per cent on any money they have put away.
Top savings rates
Martin advised that savings rates are changing rapidly just now so always check which offers the better deal first before committing.
Current top deals:
- Yorkshire bank - 3.35%
- Shawbrook Bank - 2.92%
- Cynergy Bank - 2.9%
- Sainsbury’s Bank - 2.87%
- Nationwide - 2.5%
- Kroo app increases from 2% to 3.03% next week
Martin also mentioned the 7% fixed-rate for one year available from First Direct, explaining that it is only available for existing customers who put in £300 per month.
Lloyds are also offering existing customers 4.25% on £300 per month, NatWest/RBS are offering 5.12% on £150 per month and HSBC is offering 5% on £150 per month.
For the full rules on each savings rate, minimum pay-in and maximum number of withdrawals, visit the MoneySavingExpert.com website here.
You can also catch up on the latest episode of The Martin Lewis Money Show Live on the STV Player.
To keep up to date with the latest personal finance news, join our Money Saving Scotland Facebook page here, or subscribe to our newsletter which goes out four times each week - sign up here.
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