Martin Lewis tells savers the one thing they need to do 'today' to protect money
Money Saving Expert Martin Lewis has issued a stark warning to Brits considering fixed rate savings accounts, urging them to act "today". Following the Bank of England's base rate cut from 4.5% to 4.2% last week, Martin highlighted that savings providers are likely to follow suit and reduce their interest rates swiftly.
He advised those who have been hesitant about fixing an interest rate to make their move promptly, as he believes returns are unlikely to improve. Speaking on his Money Podcast on Sunday, Mr Lewis told 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."
Elaborating on how savings providers manage fixed rate savings accounts, Mr Lewis explained that they offer a set tranche – for instance, £5million at 4.6%.
Once that amount is reached, the provider will reassess and potentially adjust the fixed rate based on new market conditions. Mr Lewis pointed out: "So, you may be able to get in now before the rate drops and they reassess based on the new information.
"And of course, because it's a fix, your rate is locked in."
Fixed rate savings accounts offer savers the chance to lock in an interest rate for a defined period, typically from one to five years, although they generally do not permit withdrawals until the term concludes.
Financial expert Mr Lewis advised: "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."
Furthermore, he warned: "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."
The financial markets anticipate at least two additional cuts to the Bank of England Base Rate before this end of the year, reports the Express. Moneyfactscompare lists the leading fixed rate options currently available.
Top one-year fixed rates
FirstSave's 1 Year Fixed Rate Bond - 4.5% AER/gross
Close Brothers Savings' Fixed Rate Bond - 4.47% AER/gross
Cynergy Bank's Fixed Rate Bond - 4.4% AER/gross
Top two-year fixed rates
GB Bank's 2 Year Fixed Rate Bond - 4.43% AER/gross
Secure Trust Bank's 2 Year Fixed Rate Bond (24.Jun.27) - 4.42% AER/gross
Oxbury Bank's Personal 2 Year Bond Account (Issue 28) - 4.4% AER/gross
Top five-year fixed rates
Birmingham Bank's 5 Year Fixed Rate Bond (Issue 20) - 4.43% AER/gross
Secure Trust Bank's 5 Year Fixed Rate Bond (24.Jun.30) - 4.42% AER/gross
GB Bank's 5 Year Fixed Rate Bond - 4.4% AER/gross.
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