Best easy access savings accounts

Saving money is a fundamental aspect of financial security and success, especially in today’s world. We’ve witnessed significant changes in the financial landscape over the years, and it's essential to adapt our strategies accordingly. One of the most versatile and beginner-friendly tools in our financial toolkit is the savings account, and in particular, the easy access savings account. You can earn tax free interest on savings accounts, £1,000 if you're in the basic tax range, and £5,000 if you're in the higher bracket.

There are a plethora of different savings accounts available within the UK, from easy access and fixed rates to help to buy and cash ISAs. You can read about all the different types of savings accounts here, but for this blog, we’re going to delve into the easy access/instant access savings accounts.

What is an easy access savings account?

Easy access savings accounts, also known as instant access accounts are precisely what the name suggests — accessible! You can deposit and withdraw money whenever you want, without facing penalties or restrictions (on the majority). These accounts offer lower interest rates than fixed savings accounts but provide the flexibility to use your funds as needed, it's also a tax efficient way to save money.

They are perfect for short-term goals, such as building an emergency fund or saving for a holiday. They are popular among Brits as they give us a higher interest rate than your average bank account, but also give us the accessibility we need.

Here are some of the best savings account to have in 2023:

Please check the account opening criteria before you apply to open any of these accounts, you usually need to be 18 years of age and a UK resident, but always check the fine print. Also always remember to compare savings accounts to find the right savings account for you, particularly compare interest rates. As the below accounts are all easy access, there is no notice period to withdraw cash. We've listed the ones with the highest interest rates at this current time.

Shawbrook Easy access savings account - 5%

A solid all rounder, Shawbrook is a UK bank that was founded in 2011. Its easy access savings account has a minimum deposit of £1,000 and unlimited deposits and withdrawals. For sole accounts, you can deposit up to £85,000, and for joint accounts £170,000. In terms of interest payments, Shawbrook offers two variations on this account. You have the option of receiving interest paid monthly or annually, but the rate changes based on your option. For monthly interest, the rate is 4.89%, and the annual interest rate is 5%. They’re both pretty high, making this account a solid leader in easy access savings.

Highlights –

• Choose what interest rate works best for you, monthly vs annually

• Unlimited deposits and withdrawals

• Manage everything online

Things to take note of –

• The rate is variable, so it is subject to change.

• Minimum deposit of £1,000

• Withdrawals take one working day and the minimum withdrawal amount is £500

• If your account balance falls below the minimum £1,000 your interest rate drops to 0.05% Gross/AER (variable)

• No live chat option on the website

Ulster bank Limited - Loyalty Saver - 5.20%

One of the best accounts around right now if you have a chunk of money ready to go. Ulster bank is one of the big four Irish clearing banks, and has NatWest as a parent. It offers a Loyalty Saver account which offers up to 5.20% interest which is higher than our number one, but it’s only on savings over £5,000, which knocks it down to number 2. You can open an instant access account with no minimum deposit, and will get an interest rate of 2.25% on balances between £1 - £4,999. There are no set rules on how often you save, or how much, so it's good if you're a regular saver.

Highlights –

• Interest is paid annually on account closure and will be paid on the amount in your account

• You can transfer into the savings account from any bank account, but if you do bank with Ulster anyway, you can use their roundup feature to help with your savings

• There is a live chat option controlled by a robot, but you can be put through to a human

Things to take note of –

• The rate is variable, so it is subject to change

• You need to be 16 years old and a UK resident. Unless you live in Northern Ireland, you can only open a digital account

• The account expires after one year, so make sure you have a plan for your money where it can continue to earn interest, whether you open another account or move it elsewhere

Aldermore - Double Access Account Issue 1 - 4.90%

If you know you won’t need to access your cash much, this one could be for you. Aldermore is a British bank that was founded in 2009, and has a range of popular savings accounts. Its recent Double Access Account Issue 1 gives you a 4.90% interest rate on your savings if you make 2 or less withdrawals in a 12 month period. Technically, it's not instant access but it does allow accessibility. So if you know you’ll only need access to your money in an absolute emergency, you can go for this account. However, if you go over the 2 withdrawal allowance, your interest rate drops to 1.50% for the remainder of the calendar year.

It has unlimited deposits, allowing you to boost your savings whenever needed, and interest is paid annually. Minimum deposit is £1,000.

Highlights –

• Deposit as much as you want up to £1,000,000

• Your interest rate and withdrawal limitations will reset annually

• The interest rate is variable, so could be subject to change

• You can message the bank in a live chat form from within your account if you’re a customer

Things to take note of –

• You can access your money at any time, but there are penalties of a lower interest rate if you withdraw more than twice in an anniversary year

• You can save up to £1,000,000 in the account, however remember only up to 85,000 is protected by the FSCS

Leeds Building Society - Limited Issue Online Account - Issue 51 - 4.85%

Another oldie but goldie, Leeds Building Society has never been far from the best savings accounts list. Its Limited Issue Online Account (Issue 51) is an instant access account and offers a good rate of 4.85% with unlimited deposits and withdrawals. It does have a minimum deposit of £1,000 and you need to maintain that to acquire the 4.85% interest rate at the end of maturity. If the balance drops below this, your interest rate goes down to 0.05%. The rate is variable, and is fixed until December 1st, 2024.

Highlights –

• Instant access - no limitations on deposits or withdrawals

• Manage everything online

• Interest is calculated daily and paid on maturity (which would be 1st December, 2024)

• Maximum balance of £1,000,000

Things to take note of –

• Interest rate is variable, so is subject to change

• If you go below the minimum deposit of £1,000 your interest rate will drop

• Your account expires on a set date of December 2024, which could be over 12 months

• Cash/Cheque deposits are not allowed

• There is no live chat option for help

All funds in savings accounts are protected by the FSCS in the UK of up to £85,000

Easy access accounts are an excellent tool if you’re looking to save money, build financial stability, meet short-term financial goals and earn tax free interest. They offer flexibility, liquidity, and a safe place to grow your money over time. As you embark on your financial journey, consider your goals, risk tolerance, and the interest rates offered by different banks to choose the savings account that best suits your needs. Start saving today, and watch your financial future take shape!

Fixed vs. Easy Access savings accounts - what’s the difference?

If you’ve heard of easy access savings accounts you’ve probably also come across fixed rate accounts.

These accounts require you to deposit a specific sum of money for a predetermined period, often ranging from a few months to several years. In return, you receive a higher interest rate compared to easy access savings accounts. However, the downside is that your money is locked in for the agreed-upon duration, making it less accessible. These accounts are better suited for long-term savings goals, like a deposit on a house or retirement.

Unlike the easy access savings accounts, you do not have access to this money, and you cannot top it up, so if you’re looking to save regularly, this account isn’t for you. However, if you already have a lump sum you want to lock away and gain some interest on, a fixed rate account could be your best bet.

Bottom line – biggest differences between a fixed and an easy access savings account is interest and accessibility.

The importance of interest rates

Interest rates play a crucial role in the world of savings accounts. They determine how much money your account will earn over time. An interest rate is the percentage your bank pays you on the money you have deposited in your savings account. The higher the interest rate, the more your money will grow. We often hear of ‘the interest rates rising’ in the news and it’s said in a negative light; when you’re spending money as a consumer, it will cost you more. However, when you’re saving money, it’s a good thing.

Savings accounts can have either variable or fixed interest rates. Variable rates can change over time, often influenced by economic conditions and central bank policies. Fixed rates, on the other hand, remain the same for a specified period.

APY (Annual Percentage Yield): This is the actual rate you earn, including compounding interest. It's essential to pay attention to the APY when comparing savings accounts because it reflects how much your money will grow annually.

Interest rates can fluctuate, affecting the earnings on your savings account. While easy access savings accounts typically offer lower interest rates than fixed ones, their liquidity and convenience make them a preferred choice for many.

Compare savings accounts

When comparing saving accounts, there are a few key things to consider.

Annual equivalent rate (AER) - the annual equivalent rate which is what the interest rate is usually based on is used to show you how much you could earn in an account over a 12 month period. Banks usually have examples on their websites to check this in your comparisons.

Accessibility - If you're looking for an easy access account, make sure there are no limits to deposits and withdrawals.

Payments - Yearly vs monthly payments. If you're looking to be paid monthly on your interest rates, you'll need to find an account that specifically offers that as most are per annum.

This blog should give you a good idea of what easy access accounts offer, so hopefully you're off to a good start. Always take your personal circumstances into consideration when choosing the right account, particularly when it comes to accessibility.

Remember, the higher the interest rate, it usually means the less access you have to your money, so be truthful with yourself on if and when you will need to access any saved money you have put away, and don't trip yourself up in the long run.

If you’re looking for the key differences between savings accounts, check out our blog How to choose the right savings account.

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