SAVINGS ACCOUNTS
Easy access accounts allow you to make additions and withdrawals without having to give notice to your savings provider, or having to wait for a fixed period of time to end. That said, this doesn’t necessarily mean that all accounts provide unlimited access. Some will limit the number of withdrawals you can make in a year, so it’s always wise to look closely at the terms and conditions of an account before making your choice.
The vast majority of easy access accounts have variable rates, which means the interest rate you are offered at the start can change over time. You’ll notice that the interest rates on easy access savings accounts tend to be lower than on notice or fixed accounts.
So, why get an easy access account at all? Well, these accounts are ideal for those who aren’t sure if they will be able to resist accessing their savings, as well as those who want to be able to access their money in the case of an emergency; for example, if their washing machine needs repairing or their car breaks down. They can also be perfect if you want to start a savings habit, but aren’t sure if you can fully commit.
No other account type offers the freedom that instant access gives, and a lot of accounts will come with low investment minimums, which means you could in some cases just put in a single pound to start saving. Of course, the more you manage to put away, the more you’ll be able to earn in interest, but there’s no pressure to keep saving after your initial deposit.
An Account With A Bonus
When you get an easy access account with a bonus, however, the bonus amount is almost always fixed for a certain amount of time, usually a year. So, you won’t have to worry about your interest rate falling below this level for the allotted time, which can offer peace of mind if you’re concerned about variable rates falling in the near future. They tend to offer comparable headline rates to bonus-free accounts, and have similar minimum investment limits and management options, so aside from the additional security of the guaranteed bonus, there’s little to differentiate them.
The downside of accounts that come with a bonus is that such deals are time-sensitive. The bonus will be deducted from the headline interest rate after the fixed period ends, so your rate of interest will reduce by a potentially quite substantial amount. That’s why anyone considering an instant access account with a bonus should review their rate when the bonus expires and see if they can switch to a better deal – though the variable nature of easy access accounts means savers would be wise to review their rate on a regular basis anyway.
FAQ’s
Broadly speaking, an instant access account will transfer your funds out instantly, so you could see them arrive in your current account within minutes, while an easy access account (otherwise known as a no notice account) can take a bit longer. However, if you do your banking online, it’s likely that you won’t see that much of a difference between the two.
If you’d like to do your banking in branch, there’s a chance that you may need to look away from the best instant access savings account rates, as these tend to be reserved for those who do their banking online. Luckily, our search results should make it easy to see which deals can be opened in branch. Then it’s just a matter of seeing if the rate is up to your standards, the minimum investment limit is something you can live with and you can manage the account in branch as well. Of course, if you’re comfortable online banking, you can usually take your pick of the deals, as the best online easy access savings rate is often the best overall.
There are many alternatives to easy access savings accounts. You could potentially get a higher interest rate while still retaining unlimited access with a high interest current account. The only downsides to these accounts are that they will usually require a certain amount of regular income and activity (such as multiple direct debits and regular monthly funding requirements), and only pay interest up to a certain balance, so if you want to get interest on more than £2,000-3,000 you could still be better off with a savings account.
The same low investment restriction applies to regular savings accounts. These tend to offer higher interest rates, but you’ll only be able to put away maybe £50 to £500 per month. Additionally, most regular savers usually only allow you to access your funds again after a year, so they’re not suitable for emergency pots.