Martin Lewis Show – Money Saving Expert warns thousands are being ripped off by savings rates – how to fix it
MARTIN Lewis has revealed how thousands could boost their savings by making a simple switch.
The consumer champion issued the advice on his latest ITV Money Show.
He revealed how “most” people are on average easy savings accounts but by “ditching and switching” to a more competitive one they could earn far more.
He showed viewers and audience members a graph of different savings accounts and what the interest rates might be on each one.
He said: “This yellow line at the bottom is the average easy access account.
“That is the one most of you have with your banks.
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“And it is now paying 0.75%. The top easy access account is paying 2.5%.
“So the huge majority of you can earn far more if you ditch and switch.”
He added that fixed-rate savings accounts, where customers can’t access the money until the end of a fixed period, were significantly higher than the top easy-access accounts.
This is because their interest rates are tied to gilts, which have gone up in recent weeks.
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It comes after savings account interest rates shot up in recent weeks after the Bank of England raised what’s known as the Base Rate to 2.25%.
It’s expected to rise again to 3% tomorrow.
Many banks and building societies up their mortgage and savings accounts interest rates if the Base Rate rises.
The BoE does this to discourage people from spending money and to reduce inflation, which hit 10.1% in September.
But while banks and building societies upping their interest rates is good news for savers, it means people’s mortgage payments are going up.
How can I find the best savings rates?
It’s always worth finding the best rate on your savings account, especially when inflation is high.
That’s because any potential extra savings can be eaten away so every extra percentage point counts.
To find the best savings rates, you can always check sites like Moneyfacts.co.uk or MoneySavingExpert.com.
MoneyFacts said the current most competitive easy-access account without a bonus savings account is with HSBC at 3%.
Meanwhile, the best one-year fixed savings account is with Tandem Bank at 4.60%.
Of course, you should always make sure you only get a savings account if you’re not in debt or you’ve just paid it all off.
It’s not worth setting up a savings account if you’ve still got loans to pay off.
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We previously unveiled a full list of the best savings accounts.
But bear in mind, interest rates are predicted to go up from tomorrow so you might find rates on saving accounts improve over the next few days.