An easy access savings account can be a good home for money that you may need to withdraw in a hurry. Be aware, though, that your savings may lose value if the interest rate is too low.
What is an easy access savings account?
Also called an instant access savings account, easy access savings is exactly what the name suggests, a savings account where you can immediately withdraw your money as and when you need it.
These accounts tend to offer slightly more interest than you would receive on a current account but don’t involve locking away your cash as is required by many other savings accounts – such as notice accounts or fixed-rate bonds.
The pros and cons of easy access savings accounts
Advantages of instant access savings | Disadvantages of instant access savings |
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What to watch out for with instant access savings accounts
Is your money growing?
You should always aim to get the highest interest rate you can and ensure that your account is paying a higher rate than inflation. If prices are rising at a faster rate than your savings, then the buying power of your cash will gradually reduce over time.
When inflation is high this can be tricky and means you should only put money you need instant access to in these accounts. If you can afford to tie your money up for longer, it is worth considering higher-paying fixed rate savings accounts or even investing.
Will you pay tax on your returns?
You have to pay income tax on any money you earn in interest in your savings accounts, but there are two exceptions.
The personal savings allowance allows basic-rate taxpayers to earn up to £1,000 interest each year without paying income tax on it, while higher rate taxpayers can get up to £500 in interest tax free.
You can also avoid paying tax on your interest by putting up to £20,000 into an individual savings account (ISA) each year.
If you are likely to exceed your personal savings allowance you should consider putting your money in an ISA instead.
» MORE: You can read more into our guide to ISAs vs savings accounts.
How long will your interest rate last?
A lot of instant access savings accounts pay a bonus rate on top of their standard interest rate. Banks use this interest rate as a way of luring you in, but the bonus rate usually only lasts a year and after that the interest rate plummets.
For example, you may find an instant access savings account with an interest rate of 1.5%. It sounds great, but when you check the small print you may see that this includes a 12-month bonus rate of 1.4%. That means after a year your savings will earn just 0.1% interest.
Make sure you check if there is a bonus rate on your account and make a note to shop around for a new savings account when the bonus ends.
Is an instant access savings account right for you?
Ask yourself these questions to see if an instant access savings account is the best option for you:
- Do you have a lump sum you want to put into a savings account? If you don’t, then a regular savings account might be a better option.
- Will you need to access your money quickly? If not, then a notice account or fixed-rate bond may give you a better interest rate.
- Will you pay tax on your returns? If the answer is yes, then look at an instant-access ISA instead.
» MORE: Learn about fixed-rate bonds
How to choose the best instant access savings account
Finding the best instant access savings account for you is pretty simple. You need to ask four things.
- What is the interest rate? The higher the rate the more money you will earn.
- How much is the minimum opening balance? Some banks require a minimum amount to open an account. Is your nest egg big enough?
- How do you want to manage the account? Do you need an in-branch service or telephone banking, or are you happy to run your account entirely online?

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