Which is the best easy access savings account?
An easy access savings account allows you to earn interest on your money, whilst still having your cash readily available. In this guide, Latest Deals breaks down how to find the best easy access savings account, the pros and cons of this type of account, and answers any other questions you may have.
What is an easy access savings account?
You can open a savings account to put away money for the future, and earn interest on your cash. Different savings accounts will offer different interest rates, and restrictions, and an easy access account is one of the most popular savings account types.
Easy or instant access savings accounts allow you to retain full access to your money. Unlike with other types of savings accounts where there are limits on how much and how often you can withdraw cash from your savings, with an easy access account there are no such restrictions.
Typically the more restrictive an account is, the higher the interest rate you’ll get. A higher interest rate allows you to make a greater return on your money. So, an easy access account likely won’t offer the best interest rates, but it does allow for flexibility.
Easy access savings accounts normally pay interest either annually or monthly. The interest you earn will usually be paid back into the savings account, and you can earn compound interest on it, if you leave it in the account. Some accounts may let you have the interest paid elsewhere if you prefer.
What’s the difference between an instant and easy access savings account?
Generally, with an instant access savings account you can withdraw money from your savings immediately, for example via an ATM machine. With an easy access savings account you’ll have access to your money, but withdrawals may take a few days to process.
IMPORTANT NOTE: It’s important to remember that once you remove money from your savings, you will be earning less interest. So, if you can, it’s best to steer clear of removing money constantly.
Easy access savings accounts pros and cons
|Access to your money||Lower interest rates compared to |
other savings accounts
|Deposit money at anytime||Savings will devalue if the interest |
rate is lower than the rate of
|Set up an account with as little as £1 deposit||Withdrawals may take a few days to|
process, depending on the account
|Better interest rates than current accounts|
Is an easy access savings account right for you?
Easy access savings accounts come with both positives and negatives. Ultimately, whether or not it’s right for you will depend on what you need from a savings account.
If you’re looking for a flexible account that allows you to dip into your savings when necessity strikes, it could be a good option for you. However, the price you’ll pay for that flexibility will be lower interest rates than other types of savings accounts on the market.
It’s also worth noting that if the interest rate on your savings is less than the rate of inflation, then your money is losing value over time. This means that as prices for goods and services tend to increase, your money will be able to buy you less as time goes on. A high interest rate can balance this out, but you’re unlikely to get one with an easy access savings account.
Which is the best easy access savings account?
Most banks and building societies offer easy access savings account options. The best account for you will be the one that offers what you need it to.
Before settling on an easy access account, you should consider these factors to help you compare accounts and find the best easy or instant access savings account for you:
- Are there any additional fees?
- Is there a cap on how often you can withdraw cash?
- How long will your withdrawals take to process?
- Is there a deposit amount required to set up the account?
- Does the interest rate compare to similar other accounts available?
- Is the provider protected by the Financial Services Compensation Scheme?
IMPORTANT NOTE: If you don’t want to commit to a fixed term bond where you have no access to your money for a set period of time, but you don’t think you need as much flexibility as an easy access savings account, you may want to consider a notice account. With a notice account you can still withdraw money, but you’ll need to give the bank notice, for example 30 days. These accounts often offer higher interest rates than easy access savings accounts. You can read more about notice savings accounts here.
How much do you need to open an easy access savings account?
Easy access savings accounts sometimes require a minimum amount to set up the account. This amount could range from £1 to £10,000 depending on the account.
Different providers will have different requirements, and there are plenty of options available, so you should be able to find an account that suits your needs. Usually, the higher the minimum deposit needed to open the account, the better the interest rate will be.
Are there high interest easy access savings accounts?
Usually, easy access savings accounts come with variable interest. This means the rate will go up or down over time. Some easy access savings accounts will come with higher interest rates than others, but be aware that there may be more restrictions with those accounts, for example, limits to the number of withdrawals you can make or high minimum deposits.
If you decide you want to open an easy access account, it’s important to shop around and compare the rates offered by different providers, to find the highest interest rate available.
If you’re looking for a higher interest rate and you don’t need immediate access to your cash, you may be better suited to a different type of savings account, for example a fixed rate bond or a regular savings account, and we have guides that explain how these work.
Bonus interest rates
Some easy access savings accounts may come with introductory interest bonus rates. This means that for a limited time when you open your savings account, you’ll get a higher interest rate, and then it will return to the normal rate on the account.
It’s important that you check what the interest rate on the account will be once the introductory period ends. Often, providers offer bonus interest rates, and then balance it out by having very low interest rates once the introductory period is over.
This can be a good way of earning more interest if you’re saving on a short term basis, as once the introductory period ends you can remove your money and find an account with a better rate.
Is your money safe in an easy access savings account?
When you’re looking for a provider, you should check to see if they’re covered by the Financial Services Compensation Scheme (FSCS). This means that your money is protected up to £85,000 if the provider were to go bust.
If you have more than £85,000 in savings, you can spread your money out across different providers, as you covered up to that amount per institution.