Martin Lewis urges people with savings to do one | U.Ok.Finance News
Brits trying to lock their money into a fixed price savings account ought to do it “today”, Money Saving Expert Martin Lewis stated.The Bank of England cut the bottom price from 4.5% to 4.2% final week, and savings suppliers are normally fast to trim the rates of interest they’ve on offer, too. With this in thoughts, those that have been holding off fixing an rate of interest could be smart to do it now, in accordance to the money guru, as returns aren’t probably to get higher than they’re at the moment. Taking to his Money Podcast on Sunday, Mr Lewis informed listeners: “We’re going to see easy access rates, both the ones being offered and your existing accounts, coming down. Fixed rate savings tend to factor in future interest rates, so they’re already lower than the easy access interest rates as they’ve factored in much of the [Bank of England] cuts. But here’s the key thing. If you’re looking to fix, I would be fixing today.”Mr Lewis defined that savings suppliers have a tendency to operate fixed price savings accounts by offering a tranche.For instance, they’ll offer £5million value of savings at 4.6%. Once it reaches £5million, it’ll look to re-establish what its new fixed price will likely be. Mr Lewis stated: “So, you may be able to get in now before the rate drops and they reassess based on the new information.”He added: “And of course, because it’s a fix, your rate is locked in.”Fixed price savings accounts allow people to lock within the rate of interest provided on the level of opening for a specified period of time, usually between one to 5 years. However, they have a tendency to be stricter than different savings accounts as minimal to no withdrawals are allowed till the time period ends.Mr Lewis stated: “The safest bet is to [fix] today. And also as a general point, analysts are predicting that interest rates are going to come down quite substantially over the next year.“If you’re risk-averse to rates going much lower and you don’t need access to the money, then the safest thing to do if you’ve got savings is to lock it away in the highest rate fix you can get right now, which will protect you from interest rates dropping.”He added: “I can’t promise anything, we live in such an uncertain world, but the risk-averse thing now is if you’ve got savings and you want to keep a higher rate, would be to lock them in on a fix.”Markets have priced in at the least two more Bank of England Base Rate cuts earlier than the tip of the 12 months. Here are the highest fixed charges accessible on the time of writing, in accordance to Moneyfactscompare.
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