MARTIN Lewis has explained why households should check their savings accounts now – or risk losing out on money.
The consumer guru issued the warning in the latest MoneySavingExpert weekly newsletter – and you could get hundreds of pounds by checking your rates.
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Martin said that the minimum interest rate you should have with your easy-access savings account is 1.5%.
These are accounts that let you add and withdraw money easily.
He said that its important to check if you’ve not switched savings accounts in the last couple of years – this is because you’re probably earning just 0.1% or even less.
But interest rates have jumped to the highest level seen since 2019 because of soaring inflation – which has jumped to 7%.
That means your money will be working harder than it was before in a savings account.
But it’s still important to note that extra cash saved will probably be eaten up by rising prices of energy, food and fuel.
Martin said you should be aiming for a savings rate of 1.5% – and gave JP Morgan’s Chase savings account as an example of one bank offering this.
He said: “Even if you opened a decent account a few months ago, as rates have increased, you’re still likely earning little more than half of what today’s top accounts pay.”
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One reader who emailed into Martin said she is gaining an extra £480 in interest per year by switching to a different savings account and cashing in on 1.5% rates.
For those who can risk putting money away without needing access to it, Martin outlined the rates you should be aiming for on fixed-rate savings accounts.
A fixed rate pays the same amount, usually each year, over a set period such as one, two or five years.
He said you should be looking at earning up to 2.3% for these accounts.
Martin said for those looking into a fixed-rate savings account, he said locking in for one or two years “seems safer” than opting for a longer length.
This is because UK interest rates are expected to rise further – which means you could miss out on switching again and making any extra money when it does.
How else can I boost my savings?
You might be missing out on the opportunity to get thousands of pounds in free cash if you’re a saver.
If you’re not signed up to a Lifestime ISA or a self-invested personal pension (SIPP), you could be missing out on tens of thousands of pounds.
A Lifetime ISA could see you bag up to £32,000 for free from the government.
It’s a savings account that anyone between the ages of 18 and 40 can open to save for buying a first home or for their retirement.
You can put in a maximum of £4,000 a year until you’re 50, and the government adds an additional 25% bonus onto what you put in.
While a SIPP is a pension you set up yourself to put aside money for your retirement, rather than through your workplace.
If you are a basic rate tax payer paying into these pensions, then for every 80p you put in, you’ll get 20p from the government through tax relief.
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