10 May 2023 , 09:56
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Martin Lewis has issued a warning to savers ahead of the Bank of England interest rates announcement tomorrow.
The MoneySavingExpert.com founder explained how savings rates are at their highest level in 14 years after 11 consecutive interest rate rises by the Bank of England.
As of writing, the Bank of England base interest rate sits at 4.25% - this is predicted to rise again tomorrow to 4.5%.
If it does rise tomorrow, then major UK banks could put their saving product interest rates up again.
Martin warned his readers that savers were not utilising the high rates and that "millions" had cash stuck in savings accounts and ISAs earning under 1%.
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He told readers that banks were "taking advantage" of savers and ripping them off with the rates they were offering.
The MoneySavingExpert.com said it was "important" that people look into this and advised his readers to shop around to find better rates than they are currently getting.
He explained: "Of course in reality, with inflation at over 10%, all savings are currently losings, as your money's purchasing power is shrinking.
"But that's why it is so important to maximise every penny of interest, to mitigate the loss. Yet so many people are failing to do this.
"You may be able to get quintuple the interest in minutes as the top savings fixes now pay nearly 5% - in fact, briefly they hit 5% but only via a short-lived deal on a special savings platform - and top easy-access near 4%."
Martin's Money Saving Expert team then highlighted the best savings accounts currently on offer at the moment and includes easy access savers, fixed rate savings, cash ISA and bonds.
When it comes to savings accounts, Martin says you shouldn't be earning less than 3% "at the very minimum".
The newsletter also explained who should consider getting a Cash ISA and who should not.
You should only consider an ISA if you could be taxed on your savings and at the moment, this would include those with savings pots containing tens of thousands of pounds.
Cash ISAs also usually pay less than normal savings accounts - so if you haven't got a large pot of cash to put in, you'll make more money by putting your pot into a savings account.
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MSE's top-paying savings accounts
- Easy-access savings account - Chip - 3.71%
- Bank-linked savings rate - Barclays Rainy Day Saver - 5.12%
- Fixed rate accounts - six month: Atom 4.1% - one year: Smart save 4.87% - two year: Isbank 4.9%
- easy access - five year: Isabank via Raisin - 4.95%
- Cash ISA - Cynergy Bank 3.5%
- Fixed rate Cash ISA - one year: Secure Trust Bank - 4.3% - two year: Newcastle Building Society - 4.4% - five year: Principality Building Society - 4.05%