Introduction to Open Money Club's guide to Easy Access Savings

Have some extra cash? But you don’t want it locked in for a fixed amount of time and you don’t want anything too risky? Want instant, easy access to your money? Knowing what to do with your hard earned savings can be confusing and tough to navigate. But, alas, do not fear! We are here to help.

An easy access savings account could be right for you. It’s important to know that the rates offered on these kind of accounts will generally be somewhat below other savings solutions, but if you are sure that you need instance access to your savings - quickly, easily an without charge - then they are a good way to ensure that your cash is at least earning some interest. Use the table below to compare the easy access savings accounts are out there. Given how low interest rates are at the moment, we have included some personal current bank accounts that offer higher interest rates in case they are a good fit for your circumstances.

In our guide to easy access savings accounts we aim to give you the tools you need to compare the best easy access accounts, let you know our favourites and give you a few explainers. You might also be interested in our guide to everyday, personal banking.

3 things you should probably consider

1

Use your ISA allowance. If you haven’t already done so, you should definitely consider using your ISA allowance. Latest rules mean that you can save a maximum of £20,000 in an ISA every year in either cash or stocks and shares tax-free. However, if you know for sure that you are withdrawing your money after a short period, it may not be the right move for you. Check out our ISAs explainer for more info.

2

£85k in any one institution. As a general rule of thumb, savers are protected for cash amounts up to £85k held at each regulated financial institution, So if you have more than £85k to save, you should be sure to split it across different financial institutions. Check out our 'how safe is my cash?' explainer for more info.

3

Interest Earned on Savings. Easy access savings accounts are all about the rates at the end of the day. Once you’ve decided that this is the solution for you, you’ll need to try and find the highest rate possible for your savings. We have also included some current accounts below, which often come with high rates on balances up to a few thousand to incentivise you to switch to them. You can compare the best interest on easy access savings accounts vs personal current accounts and decide the best solution for you. Check out our interest earned on savings explainer for more info.

Our Picks

Nationwide FlexDirect

Nationwide's Flex Direct Current Account offers one of the highest easy access savings rates out there - 5% on balances up to £2,500. Be careful though, this is only available for the first year of the account being open.

Tesco Internet Saver Account

Tesco have a simple, instant, easy-access, internet saver, which has no minimums. Offers 1.26%, which includes a bonus of 0.71% if you stay with the account for one year. If you plan to withdraw within a year, you should consider the reduced rate.

Virgin Cash E-ISA

Virgin's Easy Access Cash E-ISA has one of the best instant access ISA rates available - 1.16%. Accounts can be opened and managed easily online or in store or via. post. You can transfer your other ISAs in too.

Compare the short list of easy access savings & current accounts

Virgin Cash E-ISA

Account
Type:

Savings Account

Maximum
Investment:

£20,000

Savings
Rate:

1.16%


ISA?

Virgin Cash E-ISA offers an easy access ISA with a 1.16% interest rate, or higher, fixed rates if you lock your money up. You will receive a rate of 1.3% if you lock your money up for one year and up to 2% if you lock your money up for up to five years. You and are able to transfer your other ISAs to this account. You can withdraw funds from your account, but you will be charged between 60 and 180 days interest as a penalty. The account comes with other Virgin perks like airport lounge access. Apply online, in store or via. post.

Nationwide FlexDirect Current Account

Account
Type:

Current Account

Maximum
Investment:

£2,500

Savings
Rate:

5.0%


ISA?

Nationwide FlexDirect Current Bank Account is a free account. Offers an interest free overdraft for one year, which goes to a 50p per day charge for arranged overdrafts after the first year (equivalent to 20% on £1,000 EAR). Also offers 5% interest on balances up to £2,500 in your first year (so long as you are paying £1,000 into your bank each month), but that drops to 1% after the first year.

Tesco Easy Access Internet Saver Account

Account
Type:

Savings Account

Maximum
Investment:

£1,000,000

Savings
Rate:

1.26%


ISA?

Tesco Easy Access Internet Saver Account allows you to save as much as you want (between £1 and up to £1 million) with unlimited withdrawals. You will receive a rate of 1.26% AER, which includes a 0.71% bonus for staying in the account for 12 months. You can open and manage the account online or via. the phone app.

NS&I Easy Access Direct ISA

Account
Type:

Savings Account

Maximum
Investment:

£20,000

Savings
Rate:

1.0%


ISA?

NS&I Easy Access Direct ISA allows you to save as much as your ISA limit with unlimited withdrawals. You will receive a rate of 1% tax-free AER. Does not allow transfers of previous ISA allowance. Accounts can be opened and managed online or on the phone.

Tesco Bank Current Account

Account
Type:

Current Account

Maximum
Investment:

£3,000

Savings
Rate:

3.0%


ISA?

Tesco Bank Current Account is free. Offers arranged overdrafts at a good rate of 18.9% EAR. Also offers 2 clubcard points for every £1 spent in Tesco (double the usual) and 3% savings interest AER on balances up to £3,000.

TSB Classic Plus Current Account

Account
Type:

Current Account

Maximum
Investment:

£1,500

Savings
Rate:

3.0%


ISA?

TSB Classic Plus Current Bank Account is free. Offers an interest free overdraft of £25 and an arranged overdraft rate of 19.84% EAR with a £6 monthly fee (equivalent to a total EAR of 28.6% on £1,000). The account comes with up to £10 cashback every month and also offers 3% interest on savings balances up to £1,500.

Club Lloyds Current Account

Account
Type:

Current Account

Maximum
Investment:

£5,000

Savings
Rate:

2.0%


ISA?

Club Lloyds Current Bank Account is free as long as you pay £1,500 in each month (otherwise it's £3 per month). Offers 2% interest AER on balances up to £5,000 and also offers an annual lifestyle benefit (cinema tickets, magazine subscription, etc). Offers an interest free overdraft of £100, but BEWARE that rates are 68.4% EAR on planned overdrafts beyond that (1p per £7 per day).

Santander 123 Current Account

Account
Type:

Current Account

Maximum
Investment:

£20,000

Savings
Rate:

1.5%


ISA?

Santander 123 Current Bank Account has a monthly fee of £5. Offers arranged overdrafts for between £1 and £3 usage fee per day depending on overdraft limit (BEWARE - £1 on £1,000 is equivalent to 40% EAR), with 4 months free when you first switch to Santander. Also offers 1 - 3% cashback on household bills (you can calculate this on their website) and 1.5% interest on balances up to £20,000.

NS&I Easy Access Income Bond

Account
Type:

Savings Account

Maximum
Investment:

£1,000,000

Savings
Rate:

1.0%


ISA?

NS&I Easy Access Income Bond allows you to save as much as you want (between £500 and up to £1 million) with unlimited withdrawals. You will receive a rate of 1% AER. Open an account online, on the phone or via. post.

Coventry BS Easy Access ISA

Account
Type:

Savings Account

Maximum
Investment:

£20,000

Savings
Rate:

0.9%


ISA?

Coventry BS Easy Access ISA allows you to save as much as your ISA limit with unlimited withdrawals. You will receive a rate of 0.9% tax-free AER. Does not allow transfers of previous ISA allowance. Open and manage an account online, on the phone, in branch or via. post.

Our summary table in a non-exhaustive list of just some of the major products out there. We’ve tried to keep the column headers to a minimum, while providing you with the information we think you will care about the most. Before opening any bank or savings account, you should be sure that you do a full review of the product on its website and thoroughly read the terms and conditions. None of the information in this table is designed to provide advice, but only to empower you to help make your own decision. If you have any suggestions on how we can improve our table, please drop us a mail.

Virgin Cash E-ISA


Virgin Cash E-ISA offers an easy access ISA with a 1.16% interest rate, or higher, fixed rates if you lock your money up. You will receive a rate of 1.3% if you lock your money up for one year and up to 2% if you lock your money up for up to five years. You and are able to transfer your other ISAs to this account. You can withdraw funds from your account, but you will be charged between 60 and 180 days interest as a penalty. The account comes with other Virgin perks like airport lounge access. Apply online, in store or via. post.


Maximum Investment: £20,000
Account Type: Savings Account
Savings Rate: 1.16%
ISA?


Apply


Nationwide FlexDirect Current Account


Nationwide FlexDirect Current Bank Account is a free account. Offers an interest free overdraft for one year, which goes to a 50p per day charge for arranged overdrafts after the first year (equivalent to 20% on £1,000 EAR). Also offers 5% interest on balances up to £2,500 in your first year (so long as you are paying £1,000 into your bank each month), but that drops to 1% after the first year.


Maximum Investment: £2,500
Account Type: Current Account
Savings Rate: 5.0%
ISA?


Apply


Tesco Easy Access Internet Saver Account


Tesco Easy Access Internet Saver Account allows you to save as much as you want (between £1 and up to £1 million) with unlimited withdrawals. You will receive a rate of 1.26% AER, which includes a 0.71% bonus for staying in the account for 12 months. You can open and manage the account online or via. the phone app.


Maximum Investment: £1,000,000
Account Type: Savings Account
Savings Rate: 1.26%
ISA?


Apply


NS&I Easy Access Direct ISA


NS&I Easy Access Direct ISA allows you to save as much as your ISA limit with unlimited withdrawals. You will receive a rate of 1% tax-free AER. Does not allow transfers of previous ISA allowance. Accounts can be opened and managed online or on the phone.


Maximum Investment: £20,000
Account Type: Savings Account
Savings Rate: 1.0%
ISA?


Apply


Tesco Bank Current Account


Tesco Bank Current Account is free. Offers arranged overdrafts at a good rate of 18.9% EAR. Also offers 2 clubcard points for every £1 spent in Tesco (double the usual) and 3% savings interest AER on balances up to £3,000.


Maximum Investment: £3,000
Account Type: Current Account
Savings Rate: 3.0%
ISA?


Apply


TSB Classic Plus Current Account


TSB Classic Plus Current Bank Account is free. Offers an interest free overdraft of £25 and an arranged overdraft rate of 19.84% EAR with a £6 monthly fee (equivalent to a total EAR of 28.6% on £1,000). The account comes with up to £10 cashback every month and also offers 3% interest on savings balances up to £1,500.


Maximum Investment: £1,500
Account Type: Current Account
Savings Rate: 3.0%
ISA?


Apply


Club Lloyds Current Account


Club Lloyds Current Bank Account is free as long as you pay £1,500 in each month (otherwise it's £3 per month). Offers 2% interest AER on balances up to £5,000 and also offers an annual lifestyle benefit (cinema tickets, magazine subscription, etc). Offers an interest free overdraft of £100, but BEWARE that rates are 68.4% EAR on planned overdrafts beyond that (1p per £7 per day).


Maximum Investment: £5,000
Account Type: Current Account
Savings Rate: 2.0%
ISA?


Apply


Santander 123 Current Account


Santander 123 Current Bank Account has a monthly fee of £5. Offers arranged overdrafts for between £1 and £3 usage fee per day depending on overdraft limit (BEWARE - £1 on £1,000 is equivalent to 40% EAR), with 4 months free when you first switch to Santander. Also offers 1 - 3% cashback on household bills (you can calculate this on their website) and 1.5% interest on balances up to £20,000.


Maximum Investment: £20,000
Account Type: Current Account
Savings Rate: 1.5%
ISA?


Apply


NS&I Easy Access Income Bond


NS&I Easy Access Income Bond allows you to save as much as you want (between £500 and up to £1 million) with unlimited withdrawals. You will receive a rate of 1% AER. Open an account online, on the phone or via. post.


Maximum Investment: £1,000,000
Account Type: Savings Account
Savings Rate: 1.0%
ISA?


Apply


Coventry BS Easy Access ISA


Coventry BS Easy Access ISA allows you to save as much as your ISA limit with unlimited withdrawals. You will receive a rate of 0.9% tax-free AER. Does not allow transfers of previous ISA allowance. Open and manage an account online, on the phone, in branch or via. post.


Maximum Investment: £20,000
Account Type: Savings Account
Savings Rate: 0.9%
ISA?


Apply


Explainers for Easy Access Savings Accounts

Easy Access Savings Accounts

What should I expect from an easy access savings account?
By easy access, we mean that you can withdraw your money, usually online, instantly. There should be no charges for you to withdraw.

Who can open an easy access savings account?
Most easy access savings accounts are available to anyone who is aged 16 and over, but if you are under 18 it's worth checking the account terms and conditions before you proceed. Some easy access savings accounts may also require you to have been resident in the UK for a certain amount of time (e.g., for the last 3 years), so if you have recently moved to the country you should double-check each bank’s policy here.

Can I have more than one easy access savings account?
Absolutely. You can have as many instant savings accounts as you like in most circumstances. You just need to be sure that you only use your ISA limit of £20,000 in total across all accounts. Also, if you have more than £85k to invest, it is advisable that you spread it across different financial institutions (see below).

Will my easy access savings account cost me anything?
The majority of instant savings accounts are free to use. However, if you are using a personal current account (as opposed to a traditional easy access savings account) to access a superior savings rate, there are some accounts that will charge banking fees. If this is the case, you will need to make extra sure you are getting the deal you hoped for.



Easy Access Savings - How safe is my cash?

The last thing you want is for a bank to go bust and for you to lose your savings, so let’s go over how you are protected from the worst case scenario.

Are my savings protected on an easy access savings account?
As a general rule of thumb, your savings, whether in an instant access account or not, are protected for cash amounts up to £85k held at each regulated financial institution. This is thanks to the Financial Services Compensation Scheme (FSCS), which covers all UK-regulated current or savings accounts as well as cash held in ISAs or SIPPs.

What if I split my savings across multiple accounts?
This is important: it’s £85k per regulated institution, not £85k per account. So, for example, holding £170k split across two different accounts at PotentiallyRiskyBank Ltd is no good. If PotentiallyRiskyBank Ltd goes bust, then you’ll only be covered for £85k. However, if you had £85k in an account at PotentiallyRiskyBank Ltd and had another £85k at DefinitelyRiskyBank Ltd, you would be able to recover 100% of your savings if both banks go bust.

How do I know if my easy access savings accounts are at the same financial institution?
The tricky bit is knowing what banks are actually a part of the same authorised financial institution. Because if DefinitelyRiskyBank Ltd from the example above is actually a subsidiary of PotentiallyRiskyBank Ltd, and they are regulated under the same authorisation, then you’d only be able to recover £85k. And it’s not always immediately obvious that banks are part of the same institution just from their name. A real life example is if you held £85k in an account at Halifax and another £85k at Bank of Scotland, you are only covered for £85k, as the banks are part of the same financial institution.

You can view our blog post on How Safe are Your Savings? for further detail and a summary of which institutions are part of the same regulatory authorisation.

What if I have less than £85k?
Even if you don’t have savings in excess of £85k, it may still be prudent to spread your savings across two different banks, as if a bank collapses, you may have a period of time where your savings are completely inaccessible. But, if you won’t need immediate access to you finances, you will be covered.

How does this work for joint accounts?
Cash in joint accounts are treated as being covered for £85k per person. So together, the account is protected for up to £170k.



Easy Access ISAs

Whenever you read about savings, you will probably hear a lot about ISAs. So what are they and why should you care?

What is an ISA?
ISA stands for Individual Savings Account, and they allow people to save or invest a certain amount of cash every year free of taxes.

How much can I save in an ISA?
It differs year on year, depending on government policies. At the moment, your annual ISA allowance is £20,000.

Your ISA allowance is per year. Once you’ve saved as much as your ISA allowance, that’s it, you can’t add anymore to the account. Also, if you withdraw the savings from your ISA at any point, you have lost your allowance, you can’t re-add until the new tax year. Your ISA allowance will not roll over year to year, so to get the maximum benefit you should always aim to save your entire allowance every year.

What is an easy access ISA? What other kinds of ISAs are there?
An easy access ISA is just that… It’s an ISA that’s easy to access. This means you should be able to withdraw your savings whenever you want, preferably online, without paying a penalty fee.

To get slightly higher rates on your cash ISA savings, you may have to lock your money up for a certain period of time. Generally, the longer you commit to, the higher the rates you can benefit from. You technically can access your money within an ISA at any time, but you may be hit with some sort of penalty fee. You can read more about what’s on offer in our guide to cash savings.

If you have an even longer time horizon and you can accept some more risk, you can also invest your ISA in a stocks and shares account. You can read more about what’s on offer in our guide to managed investments.

I can get higher rates in my current account. Should I still open an ISA?
If you are definitely only planning on saving for 12 months, and after that you are going to withdraw your money, then you should absolutely just go for the highest rate you can possibly get for that period of time.

If there’s a decent chance you are going to leave your ISA savings indefinitely, then you should always try and use your allowance while you can. Even if rates are not good this year, they may be a lot more attractive in future years. If you don’t use your ISA allowance, you will lose it.

Can I switch my ISA provider?
Yes. You can definitely switch ISA providers. But you will have to check the policy of where you want to switch to, as they may only be offering certain rates on new ISA money and not accept transfers of previous years’ ISAs.

Should I just go with my bank’s online easy access ISA?
Just because a certain bank is right for your everyday, personal banking, doesn’t mean it’s a good choice for your ISA savings. With central bank rates so low at the moment, many easy access ISAs offer rates very close to zero, so just defaulting to your banks offering may not be a good choice.

We would always recommend that you review your ISA holdings at the start of every year. It’s a good time to review everything on offer from a fresh perspective and ensure you are using your ISA allowance where possible.

Don’t be scared of switching savings accounts. Providers want to attract you, and with online technology the whole process can be pretty pain free and quick. It’s definitely worth a little bit of effort.



Interest Earned on Easy Access Savings Accounts

Once you’ve figured out the kind of easy access savings account you want, it’s all about the best interest rates.

What is AER?
Interest rates are often quoted in AER, which stands for Annual Equivalent Rate. AER is designed to make comparing interest rates easier. The calculation assumes that you keep earning interest over a year and takes into account factors such as compound interest. The bottom line is, when you want to compare interest rates, look for the AER number to ensure you are comparing apples to apples. This applies to easy access savings accounts and most other accounts you may review.