Money expert Martin Lewis has explained how millions of people can earn an astonishing 50% on their money without putting it at any risk of being lost at all.
Speaking on the Martin Lewis Money Show on Monday evening, he was giving advice on how people can ensure they make the most on their money without putting it at risk.
And there are two accounts that pay at least 10 times what the best easy access ones do, although not everyone will qualify.
“I can show you how to maximise the interest on every penny… and it tops out at 50%,” Martin said.
The first is the cash lifetime ISA – that means on top of 1.4% interest with the best payer, you get 25% added extra on the first £4,000 you save a year.
There are two qualifying factors to get that cash. First, you can only open one if you’re between 18 and 40-years-old. Second, you only get the bonus if you use the money to buy your first home or wait until you’re 60.
You are allowed to access the cash sooner – but that comes with penalties that wipe out all the extra money added on top, and then a little bit extra as well .
However, there’s a way to get double that and it’s all thanks to the Government’s Help to Save scheme.
The initiative – launched in September 2018 – is designed to support claimants of Universal Credit and low incomes on by paying them a 50p bonus for every £1 they stash away over four years.
Around 3.5 million people in the UK are allowed to open one, however only a tiny fraction actually have.
Qualifying users can pay in any amount of up to £50 a month, with the 50% bonus paid out on the largest amount you have saved at any time over a two-year period.
Running for 4 years, that means you could get an astonishing £1,200 paid out – tax free- for putting money away.
“Frankly, it’s totally unbeatable if you’re eligible,” Martin said.
You can read more about the scheme and check if you qualify here .
For people with more to save, or who don’t qualify for either of those schemes, Martin said the key number to look at is currently 1.35%.
“Check now what you’re being paid, if it’s anything less than 1.35% it’s time to ditch and switch,” Martin said.
That’s what the current top-paying easy-access account – Marcus, by Goldman Sachs – is offering.
Given you can get some, or all, of your money back whenever you like with no penalties for doing so – as well as being able to top up what you like, whenever you like – there’s simply no reason not to make at very least that much interest on any money you have spare.
However, you can earn more if you’re prepared to lock some of your money away for at least a year.
The top 1 year fix pays 1.6% at the moment, the top 2 years deal pays 1.86% while if you leave your money alone for five years you can make 2.38%.
But Martin cautioned that longer-term fixes carry a secondary risk – that rates will change and while it’s the best deal now, it won’t be in two years’ time – meaning you’d have been better off fixing for shorter period then moving at the end of it.
People locking their money away for longer periods might be better off investing their money – even though it means there is a risk you could end up with less than you put away.
Investing offers a greater potential return, but also a greater chance you’ll lose cash, so the longer you can leave money there the bigger the chance you can pick a point where you’ve made money to withdraw or ride out any losses.
People thinking about doing this should speak to an independent financial adviser, Martin said. This is because where you put the money depends on your circumstances and what you’re investing for – making general advice simply isn’t possible.