Instant or easy access savings accounts allow you to earn interest on your savings while still being able to withdraw your funds if you need them. Here's more on what they are, how they work and how to choose the right one for you.
The Financial Services Compensation Scheme (FSCS) guarantees that it will step in to compensate the first £85,000 (£170,000 for a joint account) you have saved with a UK-authorised bank, building society or credit union in the event that the business goes bust.
Easy access accounts are straightforward savings accounts that let you deposit funds whenever you are able to, and withdraw them again when required (in most cases without penalty). For this reason, they can be an ideal place to stash rainy day funds that can be used as part of an emergency fund, that can be used for things such as a boiler breakdown or urgent car repairs. Many easy access accounts only require a small deposit to open them, so you won’t necessarily need a large lump sum to get started.
However, there are a few downsides. For a start, even the top-paying easy access savings accounts struggle to beat inflation these days, so don’t expect interest rates that will make your mouth water. Some accounts also come with a bonus rate that temporarily increases the rate you earn for around 12 months and after that time, the interest rate drops. It’s at this point you should start shopping around for a better account to switch to.
Also be aware that some easy access savings accounts will limit the number of penalty-free withdrawals you can make each year so always check the small print before you apply.
Current accounts and digital banking apps also offer the chance to earn interest on your money. So if you don’t want to open a whole separate savings account, this could be an alternative option for you to consider.
Kroo Bank pays a competitive rate of interest on current account balances. As a UK licensed bank, your money is protected by the Financial Services Compensation Scheme. There’s no need to move your money to a different account, the interest is paid on your main balance.
However, if you still feel you want to keep your savings separate from your current account, then digital banking apps like Revolut, Monzo and Starling have the solution. Each of these has developed a sub-savings account within their main accounts, where you can move your money - and in some cases earn some interest.
For example, Revolut’s Savings Vaults offer tiered interest depending what plan you are on. Monzo is similar, in that its Savings Pots have a higher rate of interest if you have its Plus or Premium account. Meanwhile, Starling’s Savings Spaces are more of a visual tool to keep your savings separate - but you do have the option to create a virtual card which lets you spend directly from a Savings Space.
Here’s a quick snapshot of how easy access accounts work:
Easy access savings accounts can be ideal if you’re looking to build an emergency savings cushion thanks to their ease of opening and flexibility. However, they don’t pay the best rates of interest, so if you’re looking to make more of a long-term commitment, a fixed-rate bond may be more suitable.
Fixed-rate bonds typically pay higher interest rates but require you to lock away your funds for a period of between 6 months and 5 years. The longer you can commit, the higher the interest rate will be. Note that most won’t allow you to add to your savings during the term of the bond so they are best suited to those with a lump sum to invest.
If you’re happy to take on more risk and potentially gain a greater return on your savings, you could also consider investing. However, remember that your capital is at risk and you may get back less than you invested.
Instant access and easy access accounts tend to have fewer restrictions than some other savings accounts. These types of accounts typically allow withdrawals instantly or within 1 day, and have no penalties attached to withdrawing.
For an account to be easy access rather than instant access, it means there may be a short wait when you want to take money out and there can be limits on the number of withdrawals you can make.
In our easy and instant access tables, we show products that are variable rate or cash ISAs, that allow instant withdrawals or withdrawals within 24 hours, and that have no penalties attached to withdrawals. However, for some products, there may be a limit to the number of withdrawals you can make in a specified amount.
To summarise, an easy access savings account can be a good choice in the following situations:
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My existing savings account wasn't paying much interest, so I wanted to open a new easy-access savings account with a higher rate. I chose Chip for its competitive rate, and so far it's been a great choice.
You can easily track your returns - including those that are pending - and it's easy to connect Chip with your other bank accounts so you can quickly withdraw your money if you need it. It works well as a savings account if you're happy with simple, app-only access.
If there's one thing you'd tell a friend who's thinking of getting this, what would it be?
There's a fee attached to certain features such as Recurring Save, but you can just use the free version of the Chip app if you're happy to manually deposit into your savings account.
Unlike most financial products, easy access savings accounts are not complicated to compare. Take a look at the steps below:
Our best easy access accounts are the highest interest rates available. To get the latest rates, we use Moneyfacts data, which covers nearly the full market of savings products and is checked and updated daily. We don’t include accounts from private banks.
All the savings accounts in our list have savings protection – for most, this is the Financial Services Compensation Scheme (FSCS). Other schemes include that of NS&I, which is 100% backed by HM Treasury, and the Gibraltar Deposit Guarantee Scheme.
Yes, just double-check that the deal you’re looking at is FSCS-protected (all the savings accounts with major financial institutions will be). The Financial Services Compensation Scheme protects your deposits up to £85,000 and would refund you if something were to happen to your savings account provider.
If you have more than £85,000, it’s better to spread your savings between different accounts to secure full protection.
| Rates up to | 7.49% AER |
|---|---|
| Number of accounts | 548 |
| Minimum investment | £0.01 |
| Maximum investment | £10,000,000 |
| Opening options | Branch, website, mobile app, post, telephone |
If you’re just starting to save or you are looking to build up a cash cushion to fall back on in an emergency, an easy access savings account can be a great place to start. Just remember to seek out the best interest rate and make a note of when any bonus rate expires so that you’re ready to switch to a more competitive account when the time comes.
| Response | % of respondents |
|---|---|
| N/A | 11.11% |
| Most of it | 16.67% |
| Less than half of it | 18.52% |
| Half of it | 24.07% |
| All of it! | 29.63% |
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