Martin Lewis, the Money Saving Expert, has recommended a combination of easy access and fixed savings accounts for optimal results.
In response to a query from a fan looking to diversify their money across several accounts, Martin said that two concurrent accounts – one with easy access and the other with a fixed rate – could yield good returns.
He explained: “You should have easy access for the ones you need to get hold of…but also fixing.”
He stressed, however, that any money locked into the fixed-rate account should be “money you can put away” for an extended period, as these accounts don’t provide ready access but do offer better interest rates.
Speaking on his BBC podcast, The Martin Lewis Podcast, he underscored the advantage of having both types of accounts regardless of fluctuations in the UK base rate.
As he noted: “Easy access accounts, they’re variable, if the UK base rates were to drop (the interest rates) would drop. But once you lock your money into a fix, as the name suggests, it’s fixed.”
He further advised savers that there’s no limit to the number of savings accounts one can maintain, and urged people to ensure every penny is invested where it can earn the most interest.
However, he also advised people to save according to their own habits. He said: “If you’re not on top of it, just putting it in one place where, when that ends, you’d be bothered to move it somewhere else is better than having a ‘good idea’ that ‘I’m going to put it in five or six different accounts’.”
“When it comes time to move them all, you can’t be hassled and they drop to a pants rate so you’re left with 6 pants accounts because you didn’t bother to move it.”
Highlighting a particular savings account, Martin urged Nationwide customers to take advantage of an “unbeatable” 5.5% interest rate on the 18-month fixed rate account.
This account is only available to savers who were customers of Nationwide on the 22nd May and requires a minimum opening balance £1 and a maximum of £10,000.
