Postal Savings Accounts
Compare Saving Accounts
Top UK Instant Access Account
Earn 0.72% Gross AER
- Provider – RCI Bank
- Account – Freedom Saver Instant Access Account
- Deposit from £500
- Interest paid monthly or annually
- Unlimited payments and withdrawals
- Which? Recommended Savings Provider
- FSCS Protected
Postal Savings Accounts
Postal savings accounts could be a suitable option for:
- Those who do not live within a reasonable distance of a particular bank or building society’s branch but would like to save with them nonetheless
- Those who wish to manage their finances from the comfort of their own home.
If you are interested in opening a postal savings account, it is advisable that you take the time to shop around with a number of different providers to ensure that you are getting the best possible deal available.
Please see our savings account comparison tables below, which contain details of several of the latest accounts that could be currently available to you:
There are a number of different types of postal savings account, among which could be the following:
- Notice/deposit accounts
- Individual savings accounts (ISAs)
- Instant access accounts
- Fixed rate accounts.
Postal savings accounts tend to be managed in the following way:
- Applications for such accounts are usually completed by post
To make deposits into your account, you would send a cheque to your provider by post
- Similarly, if you wish to make withdrawals, you would have to notify the bank via post
- You may also have the option to manage your account over the telephone or via the internet
- Certain postal savings accounts will also send you an ATM card, allowing you to make withdrawals.
As postal savings accounts are offered by so many different providers with varying terms and benefits, it is particularly important that you compare what is on offer.
Santander 123 Current Account
Earn 1.00% AER Fixed Interest for up to £20,000
- 1.00% AER (variable) payable on your entire balance up to £20,000
- Up to 3% cashback on household bills
- Must pay a minimum of £500 into the account each month
- Monthly fee of £5
- Mobile app
Our view: With this current account you get 1.00% AER on the first £20,000 of your cash. To qualify you will need to pay in £500 pm (Equates to a £6,000 pa salary) . Additionally you can gain up to 3% cashback on household bills – 1% on water, council tax bills and Santander mortgage payments, 2% on gas and electricity bills, and 3% on mobile phone, home phone, broadband and paid-for TV packages. The account has full savings FSCS protection.
What are fixed rate bonds?
When trying to save money for the future, there are several options open to cash savers. Options include instant access savings accounts, easy access savings accounts, notice savings accounts, fixed rate bonds and structured deposit plans.
With interest rates at the time of writing at all time lows many savers are looking for a range of best saving plans. For savers who are prepared to tie up capital for a year or more typically higher rates of interest are available from savings providers.
A fixed rate bond is a way of gaining a fixed rate of higher interest on your savings for a fixed period of time, typically between one and five years. Generally speaking the longer your savings can be locked away, the higher the interest rate you can get on your money. Some providers offer fixed rate bonds within a Cash ISA so you benefit from tax free interest returns.
Providers normally have a minimum subscription age of 18 but some providers offer options to younger savers.
How Do Fixed Rate Bonds Work?
Normally there is a minimum commitment for depositing money into a fixed rate bond – usually around £1,000, but this can be more. This makes bonds unsuitable for those who wish to top up a savings account in small increments, as this is not usually possible beyond the first lump sum, therefore could look into alternative savings and investments plans.
Having a fixed term means that bonds have a maturity date at which time you will be contacted by your savings provider and provided with options on how you wish your money to be returned to you – you may be given options of putting the money into a new account in which case you should always shop around before accepting a savings deal offered by an existing provider as the rate of interest may or may not be competitive.
Product providers do not normally allow you to access your money during the term and if they do there are normally conditions which may involve a loss of interest so ensure you read the small print before you sign up. Some fixed interest providers will allow one withdrawal a year without penalties.
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 HMRC tax form R85. Some accounts will pay interest gross and it is up to you to declare any tax owed to the Inland Revenue.
Fixed rate bonds are cash deposit based and 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 Financial Services Compensation Scheme would pay compensation of up to £85,000 per account holder per authorised institution.
What to consider when choosing a fixed rate bond
The length of time that savers choose to deposit their money depends on personal financial time frames and other budget and savings considerations. If you need rapid access to your cash, bonds are possibly not the best savings option – it might be preferable to look at an alternative savings options or just an instant access savings accounts.
Minimum deposits can vary from £500 to over £2000. Make sure that you are happy to part with that amount of money for a longer period of time! It is worthwhile having a five-year plan of projected expenses – such as mortgages, car purchases, or planning for a family or retirement – to ensure that you will not need access to your fixed rate bonds account.
Withdrawals are either not permitted or restrictions will apply. Read the provider terms and conditions so that you know what you are getting into. Some providers for example will allow one withdrawal during the term without penalties.
The payment of interest can also vary- some offer monthly interest, others quarterly or annually, and some only pay at the end of the agreed term. Choose a product that fits in with your requirements for the best rates of high interest.
Tax is payable on interest accrued unless you are a non tax payer in which case you can receive interest gross if you complete HMRC tax form R85. Alternatively it is often possible to take a Cash ISA fixed rate bond (current cash ISA allowance for 2018/19 is £20,000 per individual) from which interest can be taken tax free.
If you have cash ISAs from previous tax years you may be able to transfer to a new Cash ISA provider offering a fixed rate bond cash ISA deal.
Please note that this information is based on current law and practice which may change at any time.
Top 10 tips for your 2020 fixed rate bond selection
1. Consider all options – from instant access to fixed rate bonds to instant access options – All have advantages and disadvantages when trying to build a nest egg for the future.
2. Check the market – shop around to find the right savings plan for you. Interest rates are changing all the time and deals come and go on a regular basis.
3. Make sure you find a product that works for you – The choice of bond is dependent on the amount of money you intend to deposit, the fixed rate, and the length of the fixed rate period. Whether you want the account to be operated on an online account basis, postal basis or telephone basis. These should all be taken into consideration before making your choice. Read the savings provider terms and conditions carefully.
4. Read the fine print – determine when the provider is likely to let you access your money, how much notice is required, and if there are any penalties for requesting access before the bond matures.
5. Some deals require you to have the interest paid into a current account – check the small print.
6. Check the small print on how interest is paid – If monthly or annually this will be need to be declared if you submit a tax return. If interest is paid on maturity this may be useful for tax planning purposes.
7. Many deals require you to have internet access – Some are offered on a postal or branch basis – check the small print.
8. Check that your money is covered by the Financial Services Compensation Scheme – they will guarantee £75,000 of savings against institutional failure. Most UK banks should have this cover, but Irish banks that do not have a UK arm may not be covered by the FSCS.
9. Check what happens when your savings product matures – Providers will write to you when your account matures; if you do not respond the provider will often put your savings into a low or no interest holding account until you provide instructions on what you want to do with the money. It is therefore important to diarise the maturity of your bond and have in mind what you want to do with the money.
10. What is the tax treatment if you are a non taxpayer – If you are not a tax payer many providers will pay interest gross on submission of the relevant HMRC tax form.
- Abbey Fixed Rate Savings
- Abbey National Savings Accounts
- Abbey Savings
- Abbey Savings Accounts
- Access Bank Savings Accounts
- Alliance and Leicester Savings Accounts
- Anglo Irish Bank Savings Account
- ASDA Internet Savings Account
- Bank of Ireland Savings Accounts
- Bank of Scotland Savings Accounts
- Barclays Active Savings Account
- Barclays Savings Accounts
- Barnsley Building Society Savings Accounts
- Bath Building Society Savings Accounts
- Beverley Building Society Savings Accounts
- Birmingham Midshires Savings Accounts
- Bradford and Bingley Savings Accounts
- Britannia Building Society Savings Accounts
- Britannia Offshore Savings Accounts
- Cahoot Savings Account
- Cambridge Building Society Savings Accounts
- Capital One Fixed Rate Savings Bond
- Capital One Savings Accounts
- Catholic Building Society Savings Accounts
- Chelsea Building Society Savings Accounts
- Cheltenham and Gloucester Building Society Savings Accounts
- Cheshire Building Society Savings Accounts
- CitiBank Savings Account
- Clydesdale Bank Savings Accounts
- Co-operative Bank Savings Accounts
- Coventry Building Society Savings Accounts
- Cumberland Building Society Savings Accounts
- Darlington Building Society Savings Accounts
- Derbyshire Building Society Savings Accounts
- Direct Line Savings Accounts
- Dudley Building Society Savings Accounts
- Dunfermline Building Society Savings Accounts
- Egg Savings Accounts
- First Direct Savings Accounts
- FirstSave Savings Accounts
- Ford Money Savings Accounts
- Halifax Offshore Savings Accounts
- Halifax Regular Saver
- Halifax Savings Account
- Harpenden Building Society Savings Accounts
- HBOS Savings Accounts
- Hinkley and Rugby Building Society Savings Accounts
- HSBC Fixed Rate Savings
- HSBC Offshore Savings Accounts
- HSBC Savings Accounts
- ICICI Fixed Rate Savings Accounts
- ICICI Savings Accounts
- ING Direct Savings Accounts
- Intelligent Finance Savings Accounts
- Investec Bank Savings Accounts
- Investec High 5 Account
- Ipswich Building Society Savings Accounts
- Julian Hodge Bank Savings Accounts
- Kent Reliance Building Society Savings Accounts
- KRBS Fixed Rate Bonds
- Leeds Building Society Savings Accounts
- Leek United Building Society Savings Accounts
- Liverpool Victoria Savings Accounts
- Lloyds Savings Accounts
- Manchester Building Society Savings Accounts
- Mansfield Building Society Savings Accounts
- Marsden Building Society Savings Accounts
- Melton Mowbray Building Society Savings Accounts
- Metro Bank Savings Accounts
- Monmouthshire Building Society Savings Accounts
- National Counties Building Society Savings Accounts
- Natwest Offshore Savings Accounts
- Natwest Savings Accounts
- Newbury Building Society Savings Accounts
- Newcastle Building Society Savings Accounts
- Newcastle Savings Accounts
- Northern Bank Savings Accounts
- Northern Rock Savings Accounts
- Norwich and Peterborough Building Society Savings Accounts
- Norwich Union Savings Accounts
- Nottingham Building Society Savings Accounts
- Post Office Online Saver
- Post Office Savings Accounts
- Principality Building Society Savings Accounts
- Progressive Building Society Savings Accounts
- RBS Savings Accounts
- RCI Bank Savings Accounts
- Royal Bank of Scotland Savings Accounts
- Saffron Building Society Savings Accounts
- Saga Savings Accounts
- Sainsbury’s Bank Savings Account
- Sainsburys Internet Saver
- Sainsburys Savings Account
- Santander Offshore Savings Accounts
- Santander Savings Accounts
- Scarborough Building Society Savings Accounts
- Scottish Building Society Savings Accounts
- Scottish Widows Bank Savings Accounts
- Scottish Widows Instant Access Savings Account
- Shepshed Building Society Savings Accounts
- Skipton Building Society Savings Accounts
- Skipton Offshore Savings Accounts
- Smile Savings Account
- Stafford Railway Building Society Savings Accounts
- Standard Life Bank Savings Accounts
- Stroud and Swindon Savings Accounts
- Teachers Building Society Savings Accounts
- Tesco Savings Accounts
- Triodos Bank Savings Accounts
- Ulster Bank Savings Accounts
- Vanquis Bank Fixed Rate Savings Accounts
- Vanquis Bank Savings Accounts
- Vernon Building Society Savings Accounts
- Virgin Money Savings Accounts
- Wesleyan Bank Savings Accounts
- West Brom Savings
- West Bromwich Building Society Savings
- West Bromwich Building Society WebSave
- Yorkshire Building Society Internet Saver
- Yorkshire Building Society Savings Accounts
- Best Childrens Savings Accounts
- Best High Interest Current Accounts
- Building Society Savings Accounts
- Business Savings Accounts
- Cash ISAs
- Charity Savings Accounts
- Child Savings Accounts
- Clubs and Associations Charity Accounts
- Clubs and Associations Savings Accounts
- Compare Offshore Savings Accounts – Fair Investment Company
- Compare our Best Structured Deposit Plans – Fair Investment Company
- Fixed Rate Bonds
- Fixed Rate Savings Accounts
- Inflation Beating Savings Plans
- Instant Access Savings Accounts
- Internet Savings Accounts
- ISA Savings Accounts
- Monthly Interest Savings Accounts
- Monthly Interest Savings Accounts ISA
- Notice Accounts
- Offshore Savings Deposit Account
- Offshore Savings Guide
- Offshore Savings High Interest Accounts
- Offshore Savings Instant Access Accounts
- Pension Deposit Accounts
- Postal Savings Accounts
- Power Of Attorney Savings Accounts
- Savings Account Guides
- Savings Accounts For Over 50s
- Student Savings Accounts
- Telephone Savings Accounts
- Top ISA Deals
- Trustee Savings Accounts