Easy access savings accounts
An easy access account is one of the simplest types of savings account available to UK savers. It gives you the freedom to pay in and take out money at your leisure. And you can often open an account with as little as £1. Here’s how to find the best easy access savings accounts for you and your situation.
What is an easy access savings account?
An easy access savings account lets you withdraw money quickly and easily. You’ll earn interest on money you pay in and you can usually dip into your savings whenever you want.
Because you have easy access, this type of account could be a good way to save for emergencies – if your car or boiler breaks down, for example – as you should be able to get your hands on your money quickly in a crisis.
But it’s worth noting that not all easy savings accounts offer instant access. There could be a short wait to take your money out and you might not have unlimited access. Always look closely at the details before opening an account.
How does interest work on an instant access savings account?
Most easy access accounts have variable interest rates. This means that the rate on your account can go up or down at any time.
The amount of interest you earn will depend on the type of savings account you have and the Bank of England base rate. Most easy access accounts pay interest yearly, although you may be able to choose to have it paid monthly. This can be useful for people who want to use the interest to top up their income rather than building up their savings pot.
Interest on savings compounds. So, provided you leave it in your account, you’ll earn interest on the interest paid. This will help your savings grow faster.
Some easy access savings account offer a bonus rate to attract new savers. But this can be short term and once the bonus period is over, you could find that the rate drops below that of other banks or building societies.
Keep an eye on the interest you’re earning. If it no longer seems competitive, it could be worth moving your savings to an account that offers a better rate.
Is an easy access savings account right for me?
If you’re keen to start saving but still want to access your money for unexpected expenses, easy access accounts could offer a flexible and convenient solution.
But if you have a long-term savings goal and don’t mind locking away your money for a while, you could benefit from a higher interest rate. Alternative savings options include cash ISAs and fixed-rate savings accounts.
It may also be worth checking out a regular saver account. Many banks offer these and they typically have a higher rate of interest than some easy access accounts. They usually allow you to save a maximum of £200 to £300 a month for a 12-month period.
You could also invest in a stocks and shares ISA, but this is riskier than a savings account or cash ISA. Because the amount your investment is worth may fall as well as rise, you could get a smaller amount of money back than you put in.
What should I think about when choosing an easy access savings account?
Before opening your account, consider:
- The interest rate – how it compares to other providers and if it has a bonus
- Access – how much you need to open the account and are there any restrictions on when and how often you can get your money
- Penalties – most easy access accounts don’t have penalties but check to make sure
- Managing your account – can you manage your account online, in branch, by phone?
What are the benefits of easy access savings accounts?
As well as offering a competitive rate of interest and allowing you to pay in or take out money when you choose, the best instant access savings accounts will offer other advantages including:
- Simplicity – straightforward to set up and manage, sometimes with as little as £1. Easy to move your money if the interest rate drops.
- Build up savings – good for first-time savers and those who want to get into the habit of saving.
- Tax-free interest – you have a personal savings allowance limit, so you won’t pay tax on the first £500 to £1,000 of interest earned, depending on your tax band. For many people, that means saving is completely tax free.
- A safety net – having savings can potentially save you from having to use expensive credit or pay a penalty to access your savings in an emergency. The MoneyHelper service recommends having three months’ essential outgoings in an instant access savings account.
What are the downsides of easy access savings accounts?
An easy access account might not be the right option for you. Disadvantages include:
- Low interest rates. The Annual Equivalent Rate (AER) – how much interest you’ll earn in a year – is usually lower than fixed-term accounts and some regular saver accounts.
- Restricted withdrawals. Some easy access accounts limit the number of withdrawals you can make in a year without losing interest.
- Urge to spend. If it’s easy to get your hands on your money, it can be tempting to spend it rather than saving it for a rainy day.
What are the best instant access savings accounts for over 50s?
Typically, savings accounts that target the over 50s don’t offer any additional benefits to standard accounts. This means the best savings accounts for the over 50s are the same as those for under 50s.
Why use Compare the Market?
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Frequently asked questions
Are easy access accounts the same as instant access accounts?
They’re very similar in that they both allow you to access your money quickly, but there are some slight differences.
An instant access account offers unlimited cash withdrawals and you can take money out with a cashcard, just as you would with a current account.
With an easy access account, you might need to transfer the money from your savings account to your current account before you can get your hands on the cash. There may also be limits on the number of times you can take money out.
How much do you need to open an easy access savings account?
This can vary quite considerably. Most easy access accounts can be opened with just £1. But some need a deposit of £50 or £100, or more.
When you compare with us, we’ll show you the minimum balance you need to have in your account.
What is an easy access bonus rate?
There are easy access accounts that offer you a bonus introductory rate as an attractive incentive to open one. This is usually fixed for 12 months, after which the rate is likely to drop like a stone. Also, there are sometimes conditions to the bonus. For example, not withdrawing money for a certain period after you open the account.
It’s up to you whether you’d rather get the bonus and switch accounts after a year, or choose an account without a bonus so you don’t have to keep moving your money around. That said, it’s always a good idea to keep an eye on how much interest you’re earning so you can make the most out of your money.
Who can open an easy access savings account?
To open most easy access savings accounts, you need to be a UK resident aged at least 16. For some accounts, you need to be 18 or over. Some banks or building societies may limit certain accounts to current account customers only.
How do I open an easy access savings account?
You can open an easy access savings account with a bank or building society, either online, over the phone or by going into a branch.
In some cases, you may already need to have a current account with the provider before you can set up a savings account.
Will I be credit-checked to open a savings account?
Some banks may carry out a soft credit check to confirm your identity, which shouldn’t leave a mark on your credit record. As no credit is involved with a savings account, you generally won’t be hard credit checked.
Banks will definitely carry out an identity check to comply with money laundering regulations, so you’ll need to be able to prove who you are. Check what documents your chosen provider requires. You’ll typically need photo ID, such as a passport, and official proof of address, like a council tax letter.
Does opening a savings account affect my credit score?
No. Savings account information is not reported to the credit reference agencies. Opening a new savings account won’t count towards a better credit score.
Is there an easy access savings account with a high interest rate?
You can find top easy access accounts that have a higher rate than others by comparing with us. Bear in mind that the best easy access savings rates might be available with online-only accounts or could restrict the number of withdrawals you can make in a year. They might also offer a 12-month introductory bonus rate, which means you’ll automatically be moved to a lower rate of interest after you’ve held the account for a year.
Is my money safe in an easy access savings account?
All easy access savings accounts offered by regulated UK banks and building societies are protected by the Financial Services Compensation Scheme. This covers up to £85,000 of your savings per financial institution and as much as £170,000 if it’s a joint account.
See if your savings are safe with the FCSC’s checker.
Can I manage my easy access savings account online?
Not necessarily. Some savings are managed in-branch only, or by phone, post or via an app. Make sure you check before you open the account if this is important to you.
What are tiered rates?
Tiered interest rates go up or down as the amount you deposit increases, depending on the savings account. Typically, the greater the deposit, the higher the rate of interest would be. But that’s not always the case, so it’s worth checking what the rates are before you apply.
What do I need to compare easy access accounts?
When you compare with us, we’ll list the results by interest rate AER, from highest to lowest, and show you how much you’ll need to open an account.
If you decide to apply, we’ll take you to the provider’s website so you can give them your details.
