Why an instant access savings account could help grow your savings.
Instant access savings accounts give you the flexibility to save money in an account which attracts a good rate of interest while allowing you the freedom to access your funds on demand without penalties or restrictions.
Because of the flexibility they offer, instant access savings tend to have a slightly lower interest rate than fixed term or notice accounts. However, by saving using an instant access account, your money is still going to attract a significantly higher rate of interest than if it remained in your current account. Additionally, many financial institutions offer tiered interest rates on their instant access accounts; these are designed as an incentive because the more you save the more interest you'll earn.
The majority of instant access savings accounts can be opened and kept open with a minimal balance (often as little as £1) making them suitable for even the novice saver. Interest is usually paid annually, either on the anniversary of the account opening or on a pre-specified date. Some institutions may offer the option to take interest payments on a monthly basis, although this may be subject to a slight reduction in the rate of interest paid.
The flexibility with which money can be accessed is a definite benefit of instant access accounts as money is available when it is needed. Conversely however, this easy access feature may also offer the temptation to spend. So after building up a reasonable amount in an instant access account it may be worth looking to investing some of the money in a longer term account so that your savings can earn a higher rate of interest.
