Martin Lewis has told Brits with bank accounts that they may be sleepwalking into missing out on thousands of pounds by not switching banks.
Many are making do with classic ISAs which might offer between 1% and 2% interest every year, when there’s an option out there to gain as much as 8%.
The money guru says people should look into regular savings accounts, which offer high interest rates on small deposits made over the course of a year.
Nationwide will allow you to deposit £200 every month in their regular savings account, which has an 8% variable interest rate for a year.
That means by the end of the year, having deposited the maximum amount every month, you’ll have gained £103 in interest.
On his Money Show Live last night, Martin also highlighted First Direct, which offers a regular savings account with a 7% fixed rate.
Thanks to the higher maximum monthly deposit of £300, the total potential gain in interest is even higher than Nationwide – £135 if you’ve put in £3,600 over the year.
If you’re not already with either of those banks, you’ll get an added bonus for switching your bank account: £200 for Nationwide, and £175 for First Direct.
And there’s another way to maximise your savings even more.
Martin said: ‘You can have more than one of these in different institutions.
‘You could have two or three different institutions, so some people could save over a grand at 6%.’
However, he warned that both Nationwide and First Direct – along with Yorkshire, Skipton, Lloyds, Natwest, TSB and the Bank of Scotland, which all offer rates between 5% and 7.5% on their regular savings accounts – are linked to the bank account you have, so you need the account to get them.
If you don’t have an account with any of those banks, anyone can open a regular savings account with Saffron Building Society, which offers 5.75% variable interest, or Coventry Building Society, which offers 5.5% variable with a maximum deposit of £500.
The headline rate may only last for the first year, so you can ‘ditch and switch’ the account afterwards.
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