Martin Lewis shares money-saving hacks on accounts to bag best interest deals
It's sensible to have a savings account for all sorts of reasons.
Whether it be to keep a little money for a rainy day, to put towards holiday payments or some work to the house – many of us make sure our cash is tucked safely away each month.
But, according to Martin Lewis, a lot of us may be doing it wrong, as some accounts aren't all that beneficial. Money Saving Expert said there are some rules you need to follow to make the most out of the interest available.
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A new blog published on the site says savings are making a big comeback following years of low rates. Even though inflation is still rising, there are things you can do to boost your savings.
It's super important to make the most of your saving interest if you have to put a little less more in than you'd like to at the moment. For this reason the team put together a guide of some of the best sort of accounts to opt for.
If you're savvy with the sorts of account you go for, you'll reap the benefits. You just have to make the most of your money.
When you have a savings account it basically allows you to save your cash while earning a little interest on top. Savings interest is paid tax-free, and the majority won't have to pay tax at all.
According to Money Saving Expert, basic-rate taxpayers can earn as much as £1,000 a year tax-free. This drops down to £500 for higher-rate taxpayers.
Due to the fact rates have seen a bit of a boost lately, you'd need around £20,000 in easy-access savings at the best rates, or £16,250 in top fixed rates to get this. That's if you're a basic-rate taxpayer.
If you fall into this category, it's worth thinking about opening a cash ISA as interest on these accounts is always tax-free.
Money Saving Expert revealed its top pick saving accounts, which include the following:
- Easy-access savings which allows withdrawals – NatWest Group's Ulster Bank – 5.2%
- Notice savings, where you have to give notice to withdraw – RCI Bank – 5.6% for 95 days
- Fixed-term accounts, were you must lock cash away – Monument Bank – 5.65% for six months, Ahli United Bank via Raisin – 5.79% for nine months, Ahli United Bank via Raisin – 6.1% for one year, Ford Money – 5.95% for two years and JN Bank – 5.97% for three years
The team also offered tips from its main savings guide, but they noted some options available may pay even more. According to Money Saving Expert, some of the best accounts are:
- Lifetime ISA – a 25% bonus is available for first-time buyers between the ages of 18 and 39
- Help to Save – you can bag a 50% bonus on savings if you're on a low income
- Cash ISAs – a good option if you pay tax on savings interest
- Regular savings – if you save every month, there's up to 7.5% interest available
- Children's savings – you can bag up to 5.8% on kids' savings
- Current accounts – if you're saving smaller amounts, you can earn up to 5.12%
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