Instant access accounts

What is an Instant Access Account?

If you want to be able to withdraw your cash, if you are saving for short term goals for example, then an Instant Access Account could be worth considering. It can be useful to always have some of your savings easily available should you need to use some in an emergency.

There is no limit to how often you can access your money while it’s in the account- you can dip in to your savings or pay more in as often as you like.

Instant Access Accounts tend to pay more interest than a current account, but often less than an ISA or fixed rate bond. This is due to the increased freedom banks have to invest your money when they know they have your savings for a set period of time. When you can access your savings at any time, your provider will have to be more careful with their use of your money. With an Instant Access Account you’ll also pay tax on any interest earned on your savings, whereas an ISA is tax-free.

Instant Access Accounts tend to pay more interest than a current account, but often less than an ISA or fixed rate bond. This is due to the increased freedom banks have to invest your money when they know they have your savings for a set period of time. When you can access your savings at any time, your provider will have to be more careful with their use of your money. With an Instant Access Account you’ll also pay tax on any interest earned on your savings, whereas an ISA is tax-free.

For a more comprehensive view of all savings accounts, including Instant Access accounts, take a look at our Savings Guide.

Savings tools

Getting into the savings habit can often be the hardest part, as it can often mean you have to tighten your belt or stick to a stricter budget. To help you work out where you can make some changes to your spending we have developed a handy cost calculator so you can work out quickly and easily just where your money goes each month to help you decide where you could spend less to help you save more.

Cost Calculator Tool

If you have got a savings goal in mind, or would like to know just how long it will take you to reach your target, we have a savings calculator that can help. You can see just how much you need to save each month and how much interest you will earn.

Savings Calculator

Deciding on exactly which savings account to use can be tricky, there are fixed accounts, ISAs, easy access accounts - basically lots to choose from! To try and help you determine just where to put you money we have come up with a handy savings tree that shows you some of the places you can put your cash. This isn't financial advice, but rather a starting point for you to start thinking about what savings accounts are right for you.

Savings Accounts Decision Tree

Glossary

Base Rate

The base rate is the benchmark interest rate set by the Bank of England. A lender's rate will almost always follow the Bank of England base rate- if it goes up or down, the lender's standard variable rate will also go up or down. Fixed rate accounts mean you don't need to worry about earning less interest if the base rate goes down as you've locked in your money at a higher rate, but if the base rate goes up you won't earn the higher rate of interest either. The base rate is an important thing to consider when you're deciding whether to fix your savings or not.

Instant Access

This type of account allows you to deposit or withdraw your money at any time, with no notice or penalties.

Interest

This is the amount the financial institution that holds your account will pay you in return for saving with them. To find out how much your savings will earn, you can look at the AER- the Annual Equivalent Rate. Shown as a percentage, this tells you the rate of interest you will earn over the period of 1 year. The interest rate may be fixed, which means it will not change throughout the life of the account, regardless of whether the Bank of England base rate goes up or down. Alternatively, the rate may be variable and fluctuate along with the base rate.

Introductory Bonus

An introductory bonus is a fixed amount of extra interest which will be paid on any money you have saved in a variable interest account for a certain amount of time after you open the account. Once the introductory period is over the rate will revert to the normal variable rate, so you may wish to consider moving your money to make sure you're always getting the best rate.

Standard Variable Rate

This is the basic rate at which financial institutions pay interest to their savers. It's usually a certain percentage amount above the Bank of England base rate. Many savings accounts have an introductory bonus rate which allows you to earn more interest on your savings for a fixed length of time before the amount you earn reverts to the standard variable rate.