Martin Lewis, Money Saving Expert, is well known for breaking down complicated financial issues and helping people to save money. One key preoccupation for many Britons right now is securing a decent return on their savings. With interest rates tumbling due to the financial crisis, it has been difficult to find solid offers which provide a return on cash saved.
However, there are still leading accounts which could help individuals to get at least something back on the money they put away.
Appearing on the Kiss Life podcast alongside Swarzy Macaly, Martin first unpacked the concept of interest rates themselves.
He explained: “Interest is the price of money and that is something really important to understand.
“If I lend you money, if I give you £100, you have to pay me for the loan. If it’s one percent, you have to pay me £1 per year. If it’s 10 percent, it’s £10 per year.
And his advice may steer people away from more familiar providers in the quest for a solid deal.
He added: “The top easy access savings account right now is with Paragon Bank. Forget the high street, if you’re online savvy, look around.
“But the crucial thing is being UK regulated – make sure you’re going to a trusted source for your information, ignore the adverts.
“All UK regulated accounts have the Financial Services Compensation Scheme (FSCS) up to £85,000 per person.
“That means if the firm goes bust, you’ll get your money and your interest back guaranteed and that’s underwritten by the Government.
“So you don’t need to go to a UK bank for safety, as long as its underwritten and regulated they all have the same protection.”
For this reason, the benefits of saving in a more formal way, rather than keeping cash at home, cannot be denied.
However, once a person is able to find the providers which offer this kind of financial protection, it will be about finding the best deal.
Martin undertook a quick run down of the current best offers available to savers.
He said: “Paragon Bank pays 0.4 percent easy access so you can take your money out whenever you want.
“But if you want to lock it in for a year, where you can’t access it, the interest rate is guaranteed.
“With Paragon, the rate can go up and down, but for a fix, Zopa is the current top at 0.61 percent.
“There is an account called Chip which is more complicated, but if you go through the correct routes with links online, it can pay up to 1.25 percent with a £10 cashback.
“This, though, is not a traditional bank and its actually an auto-saving app to help you save.”
Martin highlighted the best interest rates change frequently, with some providers releasing new deals which beat out their competitors.
Checking interest rates on the day a person opens the account, he said, with a trusted website can assist in finding the best offers.
Martin Lewis is the Founder and Chair of MoneySavingExpert.com. To join the 13 million people who get his free Money Tips weekly email, go to www.moneysavingexpert.com/latesttip