Instant Access Savings Accounts Compared
Instant Access Savings accounts are provided by regulated banks and building societies in the UK and as their name suggests provide account holders immediate access to their money at all times. Access can come in different forms e.g. branch, online, postal and telephone. These types of account are often called Easy access accounts or No notice accounts. Some accounts will provide you with a cash card to allow cash access through ATMs. With a instant access or easy access savings account you benefit from interest being added either monthly or annually.
Type of Savings Account |
Savings Account Features |
Savings Account Access |
Instant Access Savings Account |
Will normally offer higher interest than what can be obtained on a current account. |
Instant access or easy access. This can be through a Branch, online account, postal account or telephone. Some providers will offer a ATM Cash Card. |
Cash ISA Savings Account |
A Savings Account within a Cash ISA where interest can be earned tax free. |
Depends on account. Some have instant access and others will operate on a notice basis. |
Fixed Rate Notice Savings Account |
With these types of savings account you have to give notice before you can take money out e.g. 7, 30, 60 and 90 days. |
An interest penalty will often be applied if notice is not given. |
Fixed Rate Bond |
Usually 1, 2, 3, 4 or 5 year saving terms with a minimum deposit. |
Designed for money to be held for full term. Early withdrawal may result in a penalty. |
Structured Deposit Plans |
Usually 3, 4 or 5 year saving terms with a minimum deposit. |
Early withdrawal may result in a penalty. Designed for money to be held for full term |
As the above accounts are deposit based you will get back your original deposit plus any interest owed unless the bank or building society gets into serious financial difficulty. In the unlikely event that this happens the FSCS may be able to pay compensation of up to £85,000 per account holder.
Things to look out for when choosing a Instant Access or Easy Access Savings Account
There is a wide range of instant access or easy access savings account deals to choose from so we have highlighted some of the features to look out for:
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Additional bonus rates – Many instant access savings accounts offer a “Special bonus” which is paid at the end of a set period typically 12 months. There are often conditions attached and savers should bear in mind that once this special bonus is paid ongoing interest paid may not be competitive.
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Interest calculation method – some savings account providers will pay interest monthly and others quarterly or annually.
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Tax – Interest paid on your savings is treated as income and you may have to pay tax on it depending on your circumstances. If you don’t pay tax you can receive interest gross if you complete tax form R85. Some accounts will pay interest gross and it is up to you to declare any tax owed to the Inland Revenue.
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Interest rates - The interest paid on instant access savings accounts is often low which is the price you pay for having instant or easy access. If you feel that you can tie up some of your money for a set period of time you may get a better interest rate deal by looking at a notice account or fixed rate bond account.
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Withdrawal restrictions - some easy access accounts have withdrawal restrictions so ensure you understand the details of teh account before you sign up.
With interest rates at the time of writing at an all-time low the impact in real terms of inflation on your money is not to be underestimated in eroding the buying power of your hard earned cash. Use our savings account comparison tables to ensure you get a good savings rate.