If you watched TV in the 90s, you probably know the saying: “It does exactly what it says on the tin.” When it comes to easy access savings accounts, that saying applies perfectly. If you’re looking for a savings account to separate your savings from your spending, but still gives you access to your cash as and when needed, then you may want to consider an easy access savings account.
What is an easy access savings account?
An easy access savings account offers your savings a safe and secure place to earn interest. It’s a flexible alternative to longer-term savings accounts, such as fixed-term bonds or ISAs. You benefit from having your money funnelled into a separate account, making it clear how much you’re saving, with the upside of being able to access it if an unexpected cost arises, such as car or home maintenance.
Because of its flexible nature, you can deposit varying sums to suit your budget. For example, during Christmas, you might be more focused on spending a little extra on presents and events, than saving. But come January, you might be keen to make up the difference by depositing a little extra. It’s a flexible account that works well for flexible savers.
Easy access vs fixed rate cash ISAs
Different savings accounts suit different needs, so choosing the best one to fit around your financial lifestyle is key to being a successful, long-term saver.
Fixed rate cash ISAs, or fixed rate bonds both can offer competitive interest rates, which are usually guaranteed for the duration of the term.
For example, if you choose a 2-year fixed rate cash ISA and deposit £1,000 at a 5% interest rate, you know that in two years, you’ll have earnt £102.50, giving you a withdrawal balance of £1102.50 to spend or reinvest.
There’ usually a minimum amount you can deposit to open a fixed term account, but it can be worth the investment and time if you know you can spare the cash for the time you agree or for those who are looking to lock away money to save for a longer term goal, such as a house deposit or wedding.
What’s an easy access ISA?
An easy access ISA (Individual Savings Account), also referred to as an “easy ISA” or “easy access cash ISA” is a type of savings account that allows you to save money tax-free, up to your annual ISA allowance. Like an easy access account, it gives you flexible access to your cash while also having the perk of enjoying the tax-free benefits of an ISA.
Find out more about the tax free benefits of ISAs here.
How does an easy access cash ISA work?
Much like a traditional easy access savings account, an easy access cash ISA allows flexible, penalty free access to your money with the added benefit of tax-free interest. You can deposit money into your ISA at any time, providing you don’t exceed the annual ISA allowance, which is currently set at £20,000 for the 2023/2024 tax year. Just like an easy access account, this could be a useful option for short-term savings goals or unexpected expenses.
How to open and manage an easy access savings account
Our easy access accounts will be coming soon. Sign up to our savings newsletter and we’ll let you know when it’s live. In the meantime, you can browse other savings options, such as fixed-rate bonds or notice accounts.
Simply visit our savings page to explore our range of savings products.
This article is correct at time of publishing and for general information purposes only. We recommend you speak to a professional financial adviser for advice. You can find a financial adviser and further personal finance information at unbiased.co.uk.
