Easy Access Savings Accounts

Finding the best easy access savings account

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If you think that you might need to access your savings in the short to medium term, your best choice is likely to be an easy access savings account.

Given that interest rates are low with little chance that they will increase in the near future, it’s even more important that you find the best easy access savings accounts on the market. This short guide is intended to help you do just that.

What is an easy access savings account?

An easy access savings account is essentially what it says; a savings account that gives you easy access to your money.

With such an account you can access your savings without giving prior notice, and without forfeiting any interest.

There are some caveat’s however: there may be restrictions on the number of penalty free withdrawals you can make in any specific time period and, although you have easy access to your savings, unlike an instant access savings account there might be a few days’ delay before you have the cash in your hand.

Instant access accounts compared with easy access accounts

It is easy to get confused by the differences between easy access and instant access accounts. While both of these provide you with rapid access to your money, with an easy access account you must transfer your savings to another account, for instance your bank account, before you can receive the money as cash.

Generally, you will carry this out over the internet and there is likely to be a delay between your request to withdraw money, the money appearing in your bank account and for the funds to clear so that you can withdraw them.

This will vary between savings accounts and will depend on the bank, but it could typically take several days with the longest delay often being clearing.

With an instant access savings account, you can walk into the bank or building society and withdraw your cash immediately.

While there are no restrictions on the amount of your savings you are able to withdraw, you might be penalised in terms of loss of interest. From the provider’s viewpoint such an account is more expensive to manage than an easy access account. Consequently, interest rates tend to be a little lower than those on an equivalent easy access account.

Easy access ISA savings account

An easy access savings account can also be held in an ISA wrapper. Otherwise known as a cash ISA, the advantage is that you don’t have to pay tax on your interest. The two largest downsides are the restrictions on how much you are able to save each year in a cash ISA and you will not be able to replace any money you withdraw. 

There is, however, an exception to this. With a flexible ISA you can withdraw money and replace it within the same tax year without losing any of your allowance, though not all providers offer flexible ISAs.

Which is the best choice for me?

The best easy access savings account will depend on your circumstances, savings objectives and tax position.

You might decide to keep some savings in an instant access savings account to provide you with emergency funds immediately; some in an easy access savings account that will provide you with cash within a few days of making a withdrawal, or alternatively you might decide on a cash ISA that provides you with all the advantages of an easy access account without the need to pay tax on your interest.

The problem with cash ISAs is that the interest rates are often lower than those of a conventional easy access savings account, so don’t forget to check out the small print.