Martin Lewis has warned anyone with a savings account that they could be losing out on making extra money on their savings due to "pants" interest rates.
The money expert urged people to check any savings accounts they have, with savings rates at their highest level for 14 years and the Bank of England having raised interest rates to 4.5% last week. He added that many people might be able to increase their interest up to fivefold within minutes, with the top fixed-rate savings accounts now paying nearly 5% interest while easy-access accounts are paying almost 4%.
Martin explained in his latest MoneySavingExpert newsletter: "Millions of people have money in savings and cash ISAs, earning far less than 1% - with banks taking advantage of customer inertia. Stop 'em ripping you off. Check yours now."
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The MSE team advised that anyone with a savings account should not be earning less than 3% interest "at the very minimum", as the top easy-access rates for lump sums will pay this and more. Easy-access savings are the simplest form of savings, where you can put money in and take it out whenever you want.
You can also opt for fixed-rate savings, also known as savings bonds, which typically come with higher interest rates. However, your money is usually locked away for a set amount of time, meaning that you can be left "stuck" if you later want to withdraw your cash or switch banks, MSE warned.
Martin added: "Of course in reality, with inflation at over 10%, all savings are currently losings, as your money's purchasing power is shrinking. But that's why it is so important to maximise every penny of interest, to mitigate the loss. Yet so many people are failing to do this."
He also shared the advice on Twitter, and many fans responded to share their success stories after taking the tip on board for their own savings. One person said: "I realised a few days ago that my ISA was only paying 0.25%. Now moved to a 3.9% instead."
"I moved to Chase after seeing you on TV. Best thing I did and earning decent interest and cash back. Thank you," someone else commented.
A third person wrote: "Set up a couple of accounts with Atom, excellent rate, close to 5%, many thanks for your advice."
And another shared: "I'm getting great interest with Chip instant access and even better in long term saving following advice on your website."
The MoneySavingExpert team have put together detailed advice on how to choose the best savings account for you, as well as compiling lists of the top easy-access and fixed-rate accounts that are currently available. You can read the handy tips on the MSE website.
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