Martin Lewis explains his golden rule for saving money – and how you can start now | Personal Finance | Finance

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Martin Lewis has given his seal of approval to a new bank switching deal that offers ‘serious perks’ including a payment of £175.

The founder of MoneySavingExpert.com said the deal from Santander also offers to pay 7 percent interest on savings and 1 percent cashback on bills.

Other perks include cheap spending when using cards linked to the account abroad and the possibility of cashback of 2 percent on all spending.

The move by Santander has opened a new front in a current account banking war as the big banks bid to snatch customers from rivals.

First Direct is already offering a switching deal with a £175 payment with a current account linked to a savings account offering 7 percent interest, fee-free overseas spending and a £250 0 percent overdraft.

And Mr Lewis believes other banks will be forced to follow suit in the coming weeks.

Customers hoovered up by the switching deals are then targeted with a range of financial products and savings accounts, which offer big returns and profits to the banks involved.

Martin Lewis and the Money Saving Expert team highlighting the Santander deal has led to a rush of people signing up.

However, some of the bank’s customers have warned this is not a one-way street. For some pointed out that Santander has recently been cutting the interest rates paid on some savings accounts.

There is also a smallprint caveat that prevents people who have previously benefited from a switching cashback payment from doing so again. This is apparently designed to stop serial switchers from cashing in.

The Money Saving Expert team said: “Santander has stomped its feet and shaken up the bank-switching market with a new lucrative deal, which at its extreme could net some over £600 a year.

“This, plus the return of a free cash deal from First Direct, are welcome.

“To switch bank, they require you to pass a not-too-harsh credit-check and use their seven-working-day switching service (it’ll close your old account for you, ensure any payments to it are auto-forwarded, and move the balance, standing orders & Direct Debits across).”

Martin Lewis stressed the value of switching saying consumers are rarely rewarded for being loyal to a bank or any other company.

He then laid out the golden rule: “Remember the 1st rule of MoneySaving Club is forget loyalty – judge each product on its own merits. If you try and stick with one bank for everything, you’ll definitely not have the best deals.”

Backing up Mr Lewis’ point, a user named IamNotLuke chimed in: “This is very true, I really like my bank as a bank but I don’t use any of their other services because they aren’t the best. Rather go best in class for each product.”

In response to questions on whether other banks are likely to join the switching war, he said: “Yes hope so though it’s been a bit sparse recently”.

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