MARTIN Lewis has issued an urgent warning to anyone with a bank account.
The MoneySavingExpert.com (MSE) founder warned that the best easy access saving rate currently available is about to disappear.
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Savers with money in the bank looking for the best rate need to act quickly, as Santander will slash interest on the bank account at midnight.
In a Tweet shared today (September 12), Martin said: “URGENT! I’ve just heard Santander will drop the rate of its top easy access savings account from 5.2% to 2.5% at midnight.
“Yet open it now, even if you don’t put money in, and you ‘should’ get the facility for 12 months.”
The bank confirmed it will be withdrawing the 5.2% rate as of midnight tonight.
It means if you open it tomorrow you’ll get the new lower rate of 2.5%.
Martin explained that savers can get the higher rate for longer if they open an account by midnight tonight
They’ll be able to hold onto the 5.2% rate for a further 12 months.
After that, the account will “mature” and the money will be put into an account with a much lower rate.
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If you deposit £1,000 over the course of 12 months, then by the time the year is up you’ll have earned £52 in interest.
If you don’t open an account now and instead have one with 2.5%, then you’ll only make £25 in interest.
You can open the account online via the Santander website – you’ll need to deposit a minimum of just £1.
The Bank of England has regularly increases the base rate, which currently sits at 5.25%.
While it isn’t great news for borrowers who” pay more for loans and mortgages, it is good news for savers as banks have been upping rates on savings in response.
Santander’s 5.2% was one of the highest we’ve seen lately, though of course this will drop within a few hours.
Tandem Bank’s Instant Access Saver pays savers 5% back on their deposits thanks to a 12-month 0.35% interest boost announced last month.
The underlying annual interest rate is 4.65% but you’ll be able to top it up to 5% once you’ve opened an account on the app and clicked the ‘top-up’ button.
The next best easy access savings account pays customers 4.65% back on their deposits.
Secure Trust Bank’s access account requires a minimum deposit of £1,000 and pays interest on savings on a monthly basis.
But, as banks are increasing rates often at the moment, it pays to check regularly if you’re getting the best rate on your account.
You can always switch if you find better, though always check the terms and conditions for any early exit fees, depending on the type of account you have.
With an easy access account, like Santander’s, you’ll usually be able to withdraw your money any time you want without a fee.
But with other savings accounts you might be charged a fee for accessing your cash, lose interest in your savings if you access cash early, or not be able to access your cash at all if you’ve locked it away for a set period.
How can I find the best savings rates?
With your current rates in mind, don’t waste time looking at individual banking sites to compare rates – it’ll take you an eternity.
Research websites like MoneyFacts and price comparison websites such as Compare the Market, GoCompare and MoneySupermarket will help save you time and show you the best rates available.
These sites let you tailor your searches to an account type that suits you.
There are five main types of savings accounts, and understanding the differences can help you narrow down the options.
- Easy-access savings accounts – usually allow unlimited cash withdrawals. However, this perk means they tend to come with lower interest returns.
- Regular savings accounts – generate decent returns but only on the basis that you pay in a set amount each month.
- Notice accounts – offer slightly higher rates than easy-access accounts but you’ll need to give advance notice to your bank (up to 95 days) before you can make a withdrawal or you’ll forfeit the interest.
- Fixed-rate bonds – these offer some of the highest interest rates. However, if interest rates increase during your term you can’t move your money and switch to a better account.
- Individual savings accounts (ISAs) – these can pay high interest but come with high withdrawal fees. But, Lifetime Isas are great for anyone aged 18-39 hoping to buy a house or save for retirement.
For more information on how to make the most of your savings, a finance expert shared his top 10 tips for savers.
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