Easy access accounts are ideal if you think you may need to dip into your savings. But, as generally rates are low, you may need to get creative to get the most out of your money.
Easy Access Savings Accounts
If you want a simple and flexible savings account where you know exactly what you’re getting, an easy access non-bonus account could be right up your street.
Savings accounts can be complicated. Between rules on how often you can make withdrawals, rate-inflating bonuses and the like, what looks like a great deal can often turn out to be less appealing.
With easy access non-bonus savings accounts you can rest assured that the rate you see is what you’ll get and that you’ll be able to access your money as and when you need to.
And, since the introduction of the new Personal Savings Allowance (PSA) in April 2016, banks and building societies now pay interest on all savings accounts gross, or before any tax is deducted. The PSA means that basic-rate taxpayers can earn £1,000 of savings interest without the taxman taking a slice, and higher rate taxpayers can earn £500. Additional rate taxpayers are not eligible for a PSA. If the interest you earn exceeds these limits, any tax you owe will usually be collected via the Pay As You Earn (PAYE) system or via your self-assessment tax return.
Sound good? Here’s a look at these kinds of accounts in a little more detail.
Surveyed 2,000 internet users, data collected by Mintel, accurate as of May 2019
What is an easy access non-bonus savings account?
Just as its name implies, an easy access savings account grants you easy access to your money whenever you like, without having to pay any penalties or forfeit any interest.
Some savings accounts place restrictions on withdrawals. Notice accounts, for example, require you to put in a period of notice before you can withdraw cash. Other savings accounts will impose penalties for making withdrawals.
Easy access accounts, on the other hand, let you take out money as you please – though some easy access accounts do limit the number of penalty-free withdrawals you can make each year.
The non-bonus part means that the rate of interest is not inflated by a temporary bonus. For example, an account may be advertised with a headline rate of, say, 1.50%, but include a 12-month bonus of 1.00%. After the bonus period ends, the rate drops to 0.50%.
So, with an easy access non-bonus account you’ll be able to withdraw cash pretty much as you please, and the rate you see is the rate you’ll get, unless it’s a variable rate account which is subject to change.
Surveyed 1,672 internet users, data collected by Mintel, accurate as of May 2019
The importance of saving
It’s always been a good idea to put some money away for emergencies, or just for rainy days. Many households are now being squeezed by the rising costs of living, making it even more important to have something to fall back on.
The benefit of an easy access account is that you’ll be able to dip into your savings at the drop of a hat, without having to give any notice or worry about penalties – after all, you’re not going to get any notice of an upcoming emergency.
The flexibility of these types of accounts comes at a price, though, as easy access accounts tend to have lower rates than other types of savings accounts.
Surveyed 1,672 internet users, data collected by Mintel, accurate as of May 2019
Things to look out for
To say the rate you see is what you’ll get with a non-bonus savings account is slightly misleading, because accounts with variable rates can go up and down. It’s important to keep an eye on your rate as you may want to move your money to a more attractive account.
Again, there may actually be restrictions on how many withdrawals you can make during the term of the account, at least without incurring penalties. Be sure to check the terms and conditions of the account before signing up.
Our savings comparison tool allows you to compare rates across a range of accounts and providers to help you find the best home for your money.
Surveyed 1,672 internet users, data collected by Mintel, accurate as of May 2019
Is your money safe?
Your savings are protected by the government-back Financial Services Compensation Scheme. This covers deposits of up to £85,000 (as of 30 January, 2017). This amount applies per individual per institution, not per account, so watch out if you have two accounts with a single bank that have a combined balance above £85,000, as not all of your money will be protected. If you have a joint account, both accountholders have £85,000 of protection, giving a total of £170,000.