Sometimes you might need quick access to the money that you have saved, such as when an unexpected bill comes along or the car needs an emergency repair. In times like this, a fixed rate bond or notice account might not be suitable.

This is where easy access accounts come in. You might have heard about easy access savings accounts but what are they, how do they work, and are they right for you? In this guide we’ll answer these questions and more!

What is an easy access savings account?

An easy access savings account is one of the most simple types of savings account available in the UK. These accounts allow you to deposit and withdraw funds quickly and easily while also earning interest on the money that you deposit into the account.

Because of the nature of easy access accounts, they’re a good way to save money for emergencies such as car or boiler repairs. Whilst they are typically simple to operate, it’s still important to understand how they work as well as the terms stated on the specific account you’re looking to open.

How do easy access savings accounts work?

Easy access accounts allow you to withdraw and deposit funds without notice. This is different in comparison to other types of account, such as fixed rate bonds, where your money is locked into the account for a predefined period or, for notice accounts, require advance notice in order to make a withdrawal.

Recently, savings providers have placed limits on how often you can withdraw from an easy access account in return for offering a better interest rate, this is known as limited access. There are therefore 2 types of easy access account – limited access and “unlimited” access.

Limited Access

Limited access simply means that you can only withdraw money within set limits of the account. You can still withdraw without notice but this often means that you can only withdraw money a certain number of times per year. A popular option is twice per year (a “Double Access” account), however the exact limits of the account will be stated within the account terms so its important to check these before opening an account.

Unlimited Access

Unlimited access accounts work exactly as they sound. These types of accounts allow you to withdraw funds as often as you like provided you have the money in the account.

It’s worth noting that, given the unlimited nature of withdrawals, you’re unlikely to get a competitive rate compared to other types of savings accounts.

If you’re making several withdrawals, your money in the account is likely fluctuate and this will affect the amount of interest you’ll earn if interest is calculated on a daily basis. Less money in the account that month, is less interest earned.

Benefits of easy access accounts

Whilst easy access accounts often provide a lower variable rate of interest in comparison to fixed rate or notice accounts, there are useful benefits.

Obviously, there is the quick access to funds in case of an emergency and accounts are generally easy to setup and manage with most providers allowing you to open an account for as little as £1.

Unlike most Regular Savings accounts, which allow limited regular deposits of up to £500 per month, Easy Access accounts usually allow you to deposit a windfall, such as a bonus payment or inheritance.

Easy Access accounts can also be a useful choice for helping to build a larger savings pot over time that can eventually be set to work harder.

For example, if you eventually save up to £1,000 in an Easy Access account, you could transfer £500 to a Bond or a notice account to perhaps earn a higher rate of interest, whilst still keeping the other half as an emergency fund.

Is an easy access account right for you?

Easy access savings accounts are a good choice for people who are looking to start building savings but want to have access to their money in case any unexpected costs occur.

However, if you have a long term savings goal or don’t mind locking your money away for a period of time, then an alternative such as a fixed rate bond may be a better choice as they can offer higher interest rates than other types of accounts.

A regular saver might also be an alternative that could work for you. These accounts allow you to save a set amount of money on a regular basis, for example £200 per month, over a predetermined amount of time.

Whilst it’s reassuring to know your money is available for you without notice, Easy Access accounts can also offer a temptation to spend. So you might want to think about how you can motivate yourself to keep saving and/or resist temptation.

For example, could you set yourself some goals or your own little rules about when to access your money (such as opting for a limited access account)? Some people prefer branch and postal easy access accounts over online accounts because they have to put in a bit more effort to withdraw their savings.

How to choose the right easy access account

When opening any savings account its important to consider certain factors to find out if the specific account is right for you and your needs. When it comes to easy access accounts, you should consider:

• The interest rate – Compare the interest rates of different accounts from different providers to ensure that you’re getting the best deal.
• The level of access – Make sure you understand the level of access the account provides, if it’s a limited access account but you’d be better suited to an unlimited access account you might be better off looking for another provider.
• Bonus periods and time defined terms – Providers can offer bonus rates to encourage you to open the account, however these can fall away after 6 months or a year and it’s important to be aware if and when a scheduled rate reduction will happen
• Account management – Make sure you understand how you can manage your account. Can you it access online? Is it in-branch only?

Easy access savings FAQs

Please note

This article is for general information only and does not constitute advice. For financial advice, please contact a qualified financial adviser to discuss your personal circumstances.