Easy access savings accounts are ideal for people who don’t want to have their finance locked in an account for a long period of time. There is the flexibility of being able to access your funds on a regular basis and without being tied down to fixed rates or long-term deals.
What is an easy access savings account?
An easy access savings account is also referred to as an instant access savings account and is similar to other accounts as they pay interest as a rate on the total value of savings deposited in the account. However, there is the added flexibility that there are no restrictions on withdrawals and you can access your funds as often as you need. It is important to look out for certain easy access savings accounts that limit the number of withdrawals that you can make each year without being charged a fee. This type of account is especially useful for savers who cannot predict whether they will need access to their funds in the near future e.g for emergency purposes.
Easy Access Savings Accounts typically offer very low levels of interest for the extra flexibility you receive. The interest rate you are offered in an Easy Access Savings Account may very well be below the headline rate of inflation. This is why before choosing to create an instant access savings account it is essential to weigh up how likely it is that you will need to make a withdrawal from your savings against the benefits gained by greater financial commitment in other types of savings accounts.
How to use bonus rates to maximise the interest earned on an instant access savings account:
Many instant and easy access savings accounts offer bonus rates. Banks may offer you a more attractive interest rate for a temporary introductory period (usually lasting 12 months) as an incentive to attract you to sign up for their accounts. For example, a bank may offer you an interest rate of 2.5% for 12 months after you open the savings account and then lower the interest rate to 1% after the bonus rate expires.
With low interest rates associated with this type of account, savers look for more creative ways to maximise the value of interest payment. It is common to switch to different savings accounts in order to benefit from bonus rates offered by different accounts. This may offer you greater returns without making you lose out on the flexibility from an easy access savings account.
Who is an Easy Access Savings Account for?
An easy access savings account is designed for those who require greater flexibility. If you are unsure about whether you will need to make a withdrawal in the near future than an instant access savings account can be an attractive option as it is easy to withdraw your money without being charged a penalty.
However, if you know that you will not need to access your savings in the near future then this account may not be the best option. The low interest rates they offer mean that you will be missing out on potential revenue. If this is the case, a fixed rate savings account may yield a better return but with less flexibility to withdraw funds.
What are the advantages of Easy Access Savings Accounts?
The biggest advantage of an Instant Access Savings Account is the freedom it offers. Being able to withdraw without any restrictions means that it is the best savings account for many people. There are many people who benefit as they know that they cannot commit their savings for a long period of time.
Also, making use of bonus rates offered can be one way to overset the relatively low interest rates offered. If you have the time and are willing to compare savings accounts then this method will allow you to benefit from both higher rates of interest and the flexibility that Easy Access Savings Accounts offer.
What are the disadvantages of Easy Access Savings Accounts?
The interest rates offered are very low relative to their alternatives as you pay for the convenience. With the current Bank of England base rate at a historic low, it is not uncommon to be offered an interest rate of 0.1%.
In addition, although you can increase your interest rates by repeatedly moving your savings around in order to benefit from bonus rate, it may prove too time consuming. Not many people are willing to compare the bonus rates that different accounts offer on a constant basis.
How to compare Easy Access Savings Accounts?
At Quiddi Compare we aim to reduce the hassle of looking for the top easy access savings account. Our dedicated team constantly search the market to find the best deal for your needs. We present the information in a clear and transparent way so that it is easy for you to compare different products and pick the one that suits your needs the most.
Our service is completely free for customers to use and will always be free to use. We simply receive a commission from the account providers in order to give you the best deals possible. Our website is completely secure even though we will not ask you to fill in your details or pass on your information to any third party companies. Simply click on the provider of your choice and you will be able to apply directly through their website.