Martin Lewis has issued advice on which savings accounts will help you get the most out of your spare money if you're looking for a fuss-free approach to your finances.
In a recent episode of The Martin Lewis Podcast, money expert Martin acknowledged that trying to figure out the right place to put your savings can be a daunting task due to all the options available. However, he assured one listener asking how they can "make their savings work harder" that it may be easier than they think to boost their cash.
"Savings is one of the simplest things to sort out," he said. "You go and check your rate, and unless you are locked into an account, which would generally be a fixed account, all you simply need to do is move your money to another savings account."
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The MoneySavingExpert founder explained that the ideal scenario would be what he dubbed a "savings fountain" model, which involves splitting your money into several different types of savings accounts - but this can be difficult for the average person to keep on top of. Instead, Martin advised that the "bog standard" approach is to first look at an easy access savings account.
Easy-access accounts will let you withdraw your money whenever you need it, and there are two types: a normal savings account or a tax-free cash ISA which will not tax your interest. While easy access tends to pay lower rates than many other types of account, they are a good place to keep your money if you think you need to make withdrawals frequently or in the near future.
Later in the podcast, Martin explained that all savers should look at fixed rate savings accounts alongside easy access. With a fixed rate account, your money is locked away for a certain period of time - while this means you can't access your money within the defined period, you will "generally get a better rate" of interest compared to easy access, Martin said.
"And you get a guaranteed rate," he pointed out. "Because all the easy access accounts are variable, so if UK interest rates were to drop, they would drop. But once you lock your money into a fix, as the name suggests, it is fixed."
However, Martin 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 once the good rate ends - because the good rate always ends - somewhere else is better than having a 'good idea' that 'I'm going to put it in five or six different accounts'."
"Then when it comes time to move them all, you can't be hassled and therefore they drop to a pants rate and you're left with six pants accounts because you didn't bother to move it. So know yourself - know whether you're the type of person who's on top of it or not," he added.
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