The biggest advantage that you can obtain from putting your money in an easy access savings account is that you will get a higher rate of interest than you do with a current account. This means that your money is not sitting idly by, but actually working for you. As such they are a great place to put any additional money from your current account and come without the hassle of getting access to your cash that you have with regular savings account.
By definition easy access accounts allow to withdraw money whenever you want. There is no required notice period and typically there is no penalty for taking money out.
There are some disadvantages too as they will generally not handle direct debits and cannot normally be used for paying bills. Don’t expect to get a cash card or cheque book and be aware transferring funds usually takes three working days to clear. Another disadvantage is that the interest accrued is subject to taxation so for any larger static amounts of money, it would be a much better option to put your money in a tax free ISA.
Easy access savings accounts
There is a wide selection of easy access savings accounts available from banks and building societies which have a variety of features on offer. Many will allow you to start the account with a minimum of just £1 and the rate of interest that you can expect generally ranges from 1.5% to 3.5%. There may be an annual limit to the number of withdrawals you can make and they usually include a bonus for not making any withdrawals in a 12 month period. This figure is generally included in the headline of the offer so if you do think you will need access to your money it’s worth considering the basic rate (without bonus) as the one to compare across the different offers. Most will have an upper investment limit although this can be as high as £5,000,000.
You’ll already need to have a current account.
Starting an easy access savings account usually has some prerequisites and a primary one of these is that you have a current account. Your current account and savings account do not have to be with the same bank or building society, but it is usually easier to get access to your money if they are. Typically it is a requirement that the accounts are set up either online or over the phone although some bank branches will handle this kind of account.