Best Instant Access Savings Accounts | moneyfacts.co.uk

Instant Access Accounts with Introductory Rates

  - Unlike instant access accounts without a bonus, which are completely variable, these accounts come with a fixed rate bonus that cannot change.
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Compare the Best Easy Access Accounts - with bonus

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1730 accounts
 

1.32%
Inc 1.12% bonus for 12 months
None £100
  1. Yes
  2. No
  3. No
  4. Yes
Details...  

1.30%
Includes a Bonus
See Details
None £1
  1. Yes
  2. No
  3. No
  4. No
Details...  

1.30%
Inc 1.05% bonus for 12 months
None £1
  1. Yes
  2. No
  3. No
  4. No
Details...
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1.25%
Inc 0.40% bonus for 12 months
None £1
  1. Yes
  2. No
  3. No
  4. No
Details...
Go to Site
 

1.25%
Includes a Bonus
See Details
None £500
  1. Yes
  2. No
  3. No
  4. No
Details...  

0.75%
Inc 0.65% bonus for 12 months
Instant £100
  1. No
  2. Yes
  3. Yes
  4. No
Details...  

0.45%
Inc 0.25% bonus for 12 months
None £1
  1. Yes
  2. No
  3. No
  4. No
Details...  

0.40%
Inc 0.20% bonus for 12 months
Instant £1
  1. Yes
  2. Yes
  3. No
  4. No
Details...  

0.15%
Includes a Bonus
See Details
None £1
  1. Yes
  2. Yes
  3. No
  4. No
Details...  
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Last Updated: Thursday 18 January 2018 19:26

Moneyfacts.co.uk Best Buys show the best products chosen by our independent experts. Where we have been able to we have also provided a link for you to open an account today. Products shown with a yellow background are sponsored products.

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Easy & instant access savings accounts with a bonus explained

  • Some easy access savings rates include a 12-month introductory bonus
  • Watch out for withdrawal restrictions
  • Think about how you'll want to manage you account (online, in branch, etc.)

Easy access accounts are ideal for an emergency fund or those who are just starting to save. As their name suggests, they allow savers to take back their invested cash and add new money in without having to ask permission from their provider first, while hopefully making it a bit less tempting to spend the money in these separate accounts. One of the most important questions anyone interested in such an account may ask themselves is: what would be the best instant access savings account for me?

To start answering this question, you will first need to determine what kind of account you want. To that end, we've looked into all you may need to know about these savings products, starting with the basics.

What are easy access savings accounts with a bonus?

As explained, easy access accounts allow you to make additions and withdrawals without having to give notice or wait for a certain fixed period of time to end. That said, some accounts will limit the number of withdrawals you can make in a year, so it's always wise to look closely at the terms and conditions of an account before making your choice.

The vast majority of easy access accounts have variable rates, which means the interest rate you are offered at the start can change over time. When you get an easy access account with a bonus, however, the bonus amount is almost always fixed for a certain amount of time, usually a year. So, you won't have to worry about your interest rate falling below this amount for the allotted time.

The downside of this is that the bonus rate will be deducted from the interest rate after the fixed period ends, so your rate of interest will reduce by a potentially quite substantial amount. That’s why anyone considering an instant access account with a bonus should review their rate and see if they can switch to a better deal when the bonus expires.

Note that instant and easy access savings accounts are here used interchangeably. While it used to be the case that instant access savings accounts would transfer funds much faster (i.e. near-instantly rather than taking days), the advent of online banking has meant that most transfers can now be completed within a matter of hours, so this distinction is not as clear-cut as it used to be. Still, if you want speedy access to your savings pot, look out for those accounts with 'Instant' as the notice/term in the table above.

What are the main benefits of these accounts?

It's clear from the above that easy access with bonus accounts offer more security, while being just as easily accessible as their counterparts without a bonus. Aside from this, they can offer rates that rival their non-bonus-giving competitors, and have similar minimum investment limits and management options.

So, why should you pick one of these accounts over a possibly higher-paying no-bonus deal? The deciding factor could easily be the wider market; if rates are on their way down when you're choosing an account, it's likely that your variable rate will decrease, which means a bonus element could be just what you need. If rates are going up, on the other hand, you may be able to benefit from even higher rates during the life of the account.

Remember, though, that this is the case for easy access accounts with a bonus as well as those without, considering there will always be a variable element to them as well. As to the criticism that you'll need to review the rate after the fixed rate bonus expires, the ever-changing nature of the rates on these accounts means ther'’s a good chance that you could benefit from a review of your chosen account after a year no matter which kind you pick.

At this point, you may be asking yourself, why get an easy access account at all? Well, these accounts are ideal for those who aren't sure if they will be able to resist accessing their savings, as well as those who want to be able to access their money in the case of an emergency; for example, if their washing machine needs repairing or their car breaks down.

No other account type offers the freedom that instant access gives. That said, not all easy access savers are created equal, so you should always look at the terms and conditions of the account you're interested in. Additionally, savings rates aren't going to be the highest on these accounts, so if you've got a substantial pot of money, consider splitting it between easy access and fixed savings to get the best of both worlds.

You may not want to keep your emergency pot too small, though. It's generally considered prudent to have three to six months' salary in savings, as a back-up in case you lose your income unexpectedly. While some of this back-up money may be fine in a notice account, you may want to put enough in an easy access savings vehicle to keep you going for a month or two.

How do fixed rate instant access savings accounts work?

As you can see from the table above, the overwhelming majority of easy access deals, including the very best instant access savings accounts, will have variable rates. There are, however, rare occasions when a fixed rate easy access deal gets released. These products may be in the guise of fixed bonds with flexible access options, and will usually be very limited and only available for a year, after which the funds may be transferred to a variable rate easy access saver.

Because they are so rare, you may think that they will be wildly appealing, but the rates on these accounts won't necessarily be market-leading. So, if you're looking to open an instant access account, don't wait around for the white whale of a fixed rate deal, as you may never find it. If you'd prefer the security of a fixed rate, you might want to consider a fixed bond instead - provided you're happy to restrict your access.

How is interest calculated on easy access savings accounts?

Most easy access savings accounts pay out interest only once a year, either on a set date or on anniversary of the account opening, although there are some accounts that give you the option to get interest added to your savings (or paid away into your current account) every month. This information can be found by clicking on 'Details'.

If you've been taking a closer look at the details of some of the best instant access savings accounts available at the moment, you may have noticed that for some accounts, there's a difference between the AER and the gross interest rate on offer.

The reason for this is explained in more detail in our guide on the subject, but what it comes down to is this: the AER, or annual equivalent rate, looks at more factors than the gross rate does. The AER assumes that you're going to keep your money in the account for a year and benefit from compound interest (the interest you receive on the extra funds you accumulate via interest in the meantime).

So, if there's an account that pays interest on a monthly basis and allows compounding, the AER will be slightly higher than the gross rate, because it counts the funds that get added every month thanks to interest, whereas the gross rate does not. In the same way, additions made throughout the year will add to your interest pay-out, but won't warrant the full yearly rate of return.

This means that if you put £1,000 in an account which pays an annual interest rate of 1%, you would get £10 after a year if you do nothing. If, instead, you add another £1,000 after exactly six months, you would have interest of £15 after one year. Then, if you leave your money in there and the interest rate remains the same, you would have £2035.15 in the account after two years thanks to compounding.

Alternatively, if you have £1,000 in an account paying an annual interest rate of 1% on a monthly basis, you would end the year with approximately £1,010.05. This may seem like a small difference, but could be much more significant for larger sums.

Easy access accounts with a bonus can further complicate this situation, as not all of them will be for 12 months. Sometimes they will have specific end dates, which may not line up with when interest is paid, or the interest may be paid on a specific date while the bonus ends later. If the fixed bonus ends before yearly interest is paid, the AER will be lower than the gross rate.

Note finally that any interest over £1,000, taking all your savings into account, will be liable to taxation per year, with only interest under this amount being tax-free to basic rate taxpayers, thanks to the Personal Savings Allowance (there's a £500 limit for higher rate taxpayers, with those in the highest tax bracket getting no tax-free buffer at all).

How can I find the best account for me?

Now that you have a clearer idea of what easy access with fixed rate bonus accounts are, you may want to know how to choose between the top easy access savings accounts. Doing an easy access savings accounts comparison can be as easy or comprehensive as you want it to be.

For instance, you may only have £1 to invest at the start, in which case it's likely that not all the top rates will be available to you. On the other hand, if you've got a large amount that you want to retain access to, you could just go for the number one account in the charts.

There will be a few other things that people look out for when deciding, such as:

The best instant access savings accounts with a bonus that are branch-based

If you'd like to do your banking in branch, there's a chance that you may need to look away from the best instant access savings account rates, as these tend not to pay the highest rates. Luckily, our chart includes some handy tick-marks which should make it easy to see which deals can be opened in branch. Then it's just a matter of seeing if the rate is up to your standards, the minimum investment limit is something you can live with and you can manage the account in branch as well.

The best online instant access savings account rates

Alternatively, some of the best deals around nowadays are only available online, with the money the provider saves by not having an extensive branch network often passed on to savers via attractive rates. It's therefore quite possible that the best online easy access savings rate is the best overall, so you may well find it at the top of the charts.

Best instant access savings accounts for over 50s

While there are still specific accounts for those who are over 50 or even 60, there are not as many as there may once have been and they tend not to pay the exclusive rates that they once did. If you desperately want one of these accounts, your best bet would be to contact your local banks or building societies. Otherwise, you may want to consider a general Best Buy account, as they are likely to rival the rates of exclusive accounts and are simple to compare.

Considering all these different criteria, it's easy to see that there is not one single best easy access account. You will have to compare instant access savings accounts to find the one that best suits you. Thankfully, our Best Buys are a great place to start, so it hopefully won't be too difficult to find what you're looking for.

 
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