Martin Lewis: How to earn 8% interest on your savings

Martin Lewis: "The highest possible interest rates come from regular savings accounts where you can earn up to 8%.

"Now, these give you higher rates, but you can only put small amounts in. They are designed for saving each month; putting away money each month. If you do have a lump sum, what you could do is just drip-feed the money from your normal savings into these to get absolutely maximum interest if you're trying to do so.

"So Tania [referring to a user who has written into the show] could put £130 a week in, but she could top it up from the rest of her savings to get the maximum. You can have more than one of these in different [banking] institutions. So you could have two or three different institutions. So some people could save over £1,000 at over 6%. Let me talk you through the top ones."

Nationwide currently offers the top regular saver paying 8% interest – and an extra £200 to switch

"All those in white [referring to Nationwide and First Direct in Martin's on-screen table] are linked to the bank account you have. So, you have to have the bank account to get them. The ones below [Saffron and Coventry building societies] aren't. So Nationwide pays the most interest – 8% for one-year variable. This will be the one that Tania should go for. The monthly amount, well, you don't have to contribute each month, that's why it says nought.

"The most you can put in is £200, which means if you maxed it out over the year, you would earn £103 interest on £2,400 in there. If you're not with Nationwide, you can switch your bank account to it at the moment and it'll pay you £200 to switch, as well as giving you that. And you've got a possible one-year 0% overdraft."

First Direct's regular saver pays slightly less, but you may end up earning more

"The other one I pull out: First Direct 7%. That rate is fixed. You have to contribute each month, but you can put more in – £300 a month. So in total, over the year you would earn more interest because even though the rates are lower, you're putting more money in there and it pays you £175 [to switch an account into it]. And if you add those up [switching incentive plus interest], for those who can max the savings out, that's actually slightly more than Nationwide.

"It's also a top overseas card for spending overseas, and it's got a £250 0% overdraft."

Saffron Building Society and Coventry Building Society also offer regular savers

"And if you're with any of these: Yorkshire, Skipton, Lloyds, NatWest, TSB, Halifax, and Bank of Scotland, then all of those have linked regular savers [paying] between 5% and 7.5%, which you could take advantage of. So if you bank with any of those places, have a look at what it is offering you.

"If you don't, or you want to open a second or third account, anybody can open the Saffron Building Society account. It pays 5.75%. You can only put [up to] £50 a month in it, though, which isn't that much."

Coventry doesn't beat fixed accounts, so if you've got lump sums, I wouldn't use it. But if you've got easy access and you're putting money away each month, Coventry Building Society 5.5%, one year, it's a variable rate [and you can put] up to £500 a month in, you'd get £179 interest.

"So the absolute maximum interest you can earn on your money is with these regular savings accounts."

Why regular saver interest might be less than you expect

Jeanette Kwakye (Martin's co-host): "I'm just looking at that OK, and Nationwide, for example, 8% on £2,400. £103 seems quite low. Why is that?

"Martin: "Ooh, very good. Lots of people say that at the end of the year. I will explain why.

"Because 8% on £2,400 would be a lot more interest. But you haven't had £2,400 in there, in the first month, you had £200 in there. So you only get interest on £200, then £400, then £600, then £800. So, if you think about it, your average balance over a year, about £1,200, isn't it, if you maxed it out that's about 8% of £1,200.

"So people get annoyed because they get less interest than they think. But on every penny in there, once it's in, you cannot beat those interest rates. And of course, if you're waiting to move it in from a normal savings account, you'd be earning interest on that, too. So you drip-feed it across. Good spot!"

Jeanette: "Well, I'm hoping that Tania has got her question answered."