Savings Focus: Post Office Online Saver hits the easy access mark
The latest version of the Post Office’s popular Online Saver account not only offers a highly competitive rate of interest, but also contains all the features you would expect from one of the most competitive accounts available on the high street. If you are looking for a new instant access savings account, or wish to transfer existing funds from an account that is no longer paying you a decent return, the Online Saver from the Post Office could be the right one for you. We take a closer look at what the latest issue has to offer.
Top interest rate
The main feature that sets the Post Office Online Saver account part from most of its competition is the interest rate. The account currently offers 1.27% AER variable gross, which at the time of writing is one of the best interest rates available on the high street.
Compared to other accounts?
The latest figures from the Bank of England* estimate that the average instant access account has an interest rate of a paltry 0.14%. This means that hundreds of thousands of savers in the UK could benefit from the Post Office’s Online Saver rate.
For example, if you have £50,000 in an average savings account you will receive just £70 per year, whereas, if you put £50,000 in the Post Office Online Saver account, you would receive £635 over the first 12 months. Just think what you could do with an additional £565…
Choice of monthly or annual Interest
An attractive feature for some savers is that the Post Office provide the option to receive interest monthly or annually, giving you the choice to decide when you are paid. The interest is paid into your Online Saver account so if you choose to have it paid monthly, you can also benefit from compound interest.
The Online Saver account may be a good option for savers, as it offers competitive interest whilst allowing instant access to your savings. The account allows you to stay flexible with your savings, as there are no limits to the number of withdrawals you can make, and no penalties or notice periods.
Quick and easy
Withdrawals are made to your nominated account, which is normally set up as your current account, so you have quick and easy access to your savings. You can also make a deposit at any point, giving you complete control over your savings.
Any transactions can be made instantaneously through either the Online Saver’s online banking, or the Post Office app. It is important to bear in mind that you have to register for the Online Saver’s online banking service to manage your account via the internet or on the mobile app.
The interest rate on offer includes a fixed interest bonus of 1.02% AER for 12 months from the account opening. Since it is fixed, this part of your interest rate is guaranteed not to change for the first 12 months. However, after 12 months it is important to note that the rate will revert to the Post Office’s underlying rate, which currently stands at 0.25% AER variable. Although this rate is still above the average quoted for instant access, at this point you would need to consider your options again.
Starting deposit and account balance
It is possible to open an account with the Post Office with just £1 and there is no minimum operating balance, once the account is up and running. There is no restriction on the size of a deposit, so long as the account’s balance does not exceed £2 million.
Available to all
Provided you are aged 18 or over and a UK resident, this account is open to all savers, both new and existing customer of the Post Office.
Easy to apply
The account has to be opened online but only takes a few minutes to apply. You can open your Post Office Online Saver by clicking here »
The Post Office
The Post Office is one of the best-known brands in the country having over 370 years of service. One of the UK’s largest financial services chains, they have over 11,500 branches nationwide which receives over 17 million customer visits per week.
Financial Services Compensation Scheme
The Post Office Online Saver is provided by the Bank of Ireland UK which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority. As a UK regulated bank, it is also a member of the Financial Services Compensation Scheme (FSCS). The Scheme can pay compensation to customers if they are eligible and the Post Office is unable to pay claims against it, for example if it ceases to trade or becomes insolvent. The Scheme will cover up to £85,000 per person for money held on deposit.
Find out more
To find out more about the Post Office Online Saver, please click here »
* Bank of England average quoted household interest rates for instant access savings, 30th September 2017
AER stands for the Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year.
Gross rate is the interest rate you are paid without the deduction of income tax. The account does not deduct tax from the interest paid. The tax treatment may be subject to change in the future and depends on your individual circumstances.