Product type | AER | |
---|---|---|
Instant access savings | 5.00% | |
Notice savings | 5.05% | |
Cash ISAs | 4.87% | |
1 year fixed rate bond | 4.85% | |
5 year fixed rate bond | 4.27% | |
Fixed rate bond | 4.87% |
An instant access or easy access savings account is one of the most flexible places to put money away. That’s because these accounts allow you to withdraw cash without facing any penalties. You’ll still earn interest on your savings, but you can also dip into them whenever you want to, whatever the reason.
It's also worth noting that easy and instant access savings accounts normally have a variable interest rate. This means the rate can go up or down, depending on the market. This is the main difference between instant and fixed-rate accounts, as the latter guarantees a specific interest rate for a set term.
This type of savings account is useful if you’re saving for an emergency fund or a short-term savings goal, such as buying a new home appliance or paying for a holiday. However, the flexibility offered by easy or instant access savings accounts means that interest rates can be lower than for other types of savings products.
However, as the inflation rate has slowed to 2.3%, there are many savings accounts offering an interest rate above this so it'll give your money more purchasing power.
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Interest is essentially the main reason we open a savings account. Many providers offer bonus interest rates to entice new customers, while others have regular deposit requirements to earn those high rates. So, it's important to understand all the elements of the deals on offer. Interest may be paid out annually, or monthly, so keep that in mind too when picking an account.
With instant or easy access accounts, you should have more access to your money than other accounts. Some providers allow you to withdraw as and when you need it. Others may limit the number of withdrawals you're allowed within a certain period or charge you an interest penalty after a certain number of withdrawals.
Before opening an account, always check the terms and conditions. Some providers require you to make a minimum deposit just to open an account. Others may require a regular monthly deposit to earn the advertised interest rate – although this is not usually the case with easy access accounts.
We picked these deals by weighing up factors such as the interest rate, withdrawal conditions, and minimum opening balance for this product.
To open a savings account for yourself, the basic eligibility criteria are:
Being 16 or older
Being a UK resident
Once you've chosen the instant access savings account you want using the steps mentioned above, getting set up is simple. All you need to do is:
Fill out an application form with the bank or provider. Typically, you can do this online, but you may also be able to open an account in a bank branch.
Provide proof of ID and address documents. Usually, a driver's licence and utility bill should suffice. Just make sure the utility bill has your current address.
Make the minimum deposit. Some instant access savings accounts can be opened with as little as 1p, but typically, most require £1 or more.
The average rates have been calculated by taking the rates from the whole of market at the time of the base rate change. Source: Defaqto and Bank of England data. Updated August 2024.
As the name implies, with an instant access savings account you can withdraw your savings instantly. You can either transfer the money into your current account or withdraw it at a branch. There's no penalty for taking money out.
With easy access savings accounts, while you can withdraw your money easily, it might still take a few days to get your money. Sometimes you have to link your easy access account to another account into which your withdrawals will be paid.
Easy access cash ISAs are just like easy access savings accounts, but all the interest you make is free from income tax. This tax break is less attractive to many since the introduction of the personal savings allowance, which means basic rate taxpayers can earn up to £1,000 in interest a year without paying tax and should generally should only consider an easy access ISA if it’s offering a better rate than a traditional savings account. However, higher rate payers only get a £500 savings interest allowance, while additional rate payers don’t get any allowance at all.
A high interest current account could be a good alternative to an easy access account as there are some accounts on the market offering very competitive interest rates. If you have money sitting in a current account with 0% interest and you can meet the terms and conditions to have an account with a higher rate of interest, then this is also an option worth exploring.
If you know you won’t need your money for a while, you may want to consider a fixed-rate savings account. These lock your money away for a set period, typically between one and five years. In return, you benefit from a higher interest rate than you can get with an instant access account. However, if you need to access your cash early, you’ll usually face interest penalties and/or exit fees.
With a regular savings account, you promise to save a certain amount of cash, say between £25 and £250, every month for the next year. Making this commitment generally allows you to access better interest rates than with an easy access account and is also a good way to get into a regular saving habit. Withdrawals are usually not allowed. However, some accounts will let you make one cash withdrawal per year, so check for this if you think you might need to access your savings.
These accounts allow you to make withdrawals but only after giving notice. The amount of notice you have to give will be pre-agreed and could be anything from seven to 180 days. So, think carefully about whether you might need your money in an emergency, and how quickly you might need to access it if so. The longer the money is locked away, the better the interest rate you’re likely to receive.
One problem with savings accounts is that they typically pay less than inflation, which means the purchasing power of your savings is eroded over time. So, if you’re saving for the long term (more than five years), you might want to consider investing your money. A well-diversified portfolio can generate returns that beat inflation over time. However, there are risks, and volatility means that your balance will fluctuate, and you could even end up with less than you saved. If you are going to invest, consider a stocks and shares ISA so the returns are tax-free.
Yes, but you need to shop around. While most instant access savings accounts only offer interest paid out annually, some pay out monthly interest instead.
Not always, so make sure you check before you open the account.
Most banks are backed by the Financial Services Compensation Scheme (FSCS) which protects your money up to £85,000 in a single institution.
Currently, our best interest rate for an easy access account is 5%.
Some instant access accounts come with an introductory bonus that lasts for a set period. Choosing an account with a bonus can therefore increase your interest payments in the short term. However, when the bonus period ends, you will probably have to switch to another account to keep earning one of the best instant access savings account rates.
Below you can find a list of our savings pages:
Investment pages (capital at risk):
Very good website
Hub of information!
Super accessible and easy to use