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Martin Lewis, the founder of MoneySavingExpert.com (MSE), has encouraged Britons to capitalise on high-interest savings accounts and warned against keeping money in accounts that offer less than four percent interest.
In recent months, Martin has been urging people to seize the opportunity of higher savings rates before they potentially start to decline. In a recent MSE newsletter, he revealed that some individuals express “reticence” about switching providers to secure a better savings rate, especially if the provider is not a well-known banking name.
Martin expressed understanding for this hesitation, as savings are often considered “risk-free” money. However, he pointed out that all UK institutions offer the same £85,000 per person savings safety protection.
Therefore, it doesn’t matter who you save with, as long as the institution is UK-regulated, your money will be protected. Martin suggested that those who are apprehensive might be missing out on significant boosts to their savings, the Mirror reports.
He added: “Check your savings rates today, owt below four percent isn’t enough.”
To assist those who are uncomfortable saving their money with lesser-known firms, Martin highlighted some of the more mainstream banks offering savings products with over four percent interest. He advised: “Unless you’re locked in a fix, all you usually need do to is open a new account, withdraw from existing savings, and put the money in the new one! And if it’s a big name that’ll convince you to do that – go for it.”
Martin pointed out that currently, standard savings accounts are offering higher interest rates than cash ISAs, excluding easy-access accounts. He suggested that if your earned interest doesn’t exceed the personal savings allowance – set at £1,000 for basic tax-payers – you should opt for the account with the higher rate.
However, if your interest earnings will surpass this allowance, an ISA is the better choice. Here are the top savings accounts from well-known providers as recommended by Martin Lewis and MSE.
Top standard savings accounts
- Yorkshire Building Society – 4.8 percent with a minimum deposit of £1
- Tesco Bank offers – 4.76 percent with a minimum £1 deposit
- The Post Office – 4.75 percent with a minimum £1 deposit
Top Cash ISA
- Marcus by Goldman Sachs – 4.75 percent for new savings only. You can’t transfer money from existing ISAs
- Post Office – 4.6 percent for new savings and transfers from existing ISAs. The minimum deposit to pay is £100
One year fixed savings
- MBNA (part of Lloyds Group) – 5.05 percent with a minimum £1,000 pay-in
- Tesco Bank – 4.91 percent for a minimum of £2,000
One year fixed cash ISA
You can deposit up to £20,000 per annum into an ISA, and any interest earned is tax-free. You have the option to close it early and withdraw funds, but be aware that MSE warns of an interest penalty for doing so (this applies to the two-year fixed cash ISA as well).
- Virgin Money – 4.61 percent with a minimum £1
- NatWest – 4.6 percent with minimum deposit of £1,000
