Martin Lewis issues warning to anyone with just one bank account
Money expert Martin Lewis warned that people with only one account are losing out.
Martin Lewis has warned anyone who only banks with one firm that they are ‘by definition’ losing money and 'loyalty doesn't pay'.
The money expert took to his podcast, The Martin Lewis Podcast, on BBC Sounds and Spotify on Thursday, March 6 where he answered a question from a member of the public about where to stash savings. She had asked him whether she should ‘keep all her money in cash’ because of consecutive cuts to interest rates. Martin then advised that savers should ‘stop sticking with one bank’ because there is ‘no one financial institution that is the top of the table’ for multiple products and warned ‘loyalty does not pay’.
Martin said that he has several bank accounts with different lenders and that the only way to maximise your money is by shopping around for different financial products. He also warned that it's extremely risky to keep cash outside of a bank and that stuffing it under your mattress won't be protected by home insurance.
He said: “Money in a bank account is protected up to £85,000 per person per financial institution.
“Money kept in cash under your mattress - well the best home insurance policy possible would only protect you for up to £1,000 of cash. So it is very very unsafe to have money of that bulk in cash and frankly you are more likely to be robbed than it is you will be robbed from the bank. Plus the bank does pay you interest.
“The answer is stop being loyal and sticking with your bank, at the moment with savings you can be earning getting on for 5% easy access, the likes of Chip and Trading212 are offering that in their Cash ISAs, and there are a whole host of other accounts out there that are paying decent rates.
“Tesco, if you want a big name, 4.41% in its easy access account, all of those are probably smacking the pants off your bank. So stop being loyal with your bank would be the answer, get your money out of your bank and put it in the top paying savings accounts not just sticking with your bank.”
Martin added that ‘loyalty does not pay’ because you can only get the best rates for various products such as savings, credit cards, ISAs and mortgages, by spreading across multiple companies.
He added: “By definition by the way, there is no one financial institution that is top of the table at the moment for any more than one product.
“Therefore if you have more than one product with one financial institution by definition you don’t have the best buys. Loyalty in that sense does not pay.”
The Martin Lewis Podcast is still available on BBC Sounds, Spotify and Apple Music.
