Welcome to our guide to easy access savings accounts; the flexible and versatile savings option for individuals and businesses seeking to grow their balances whilst keeping their funds readily available.
This guide covers the essentials relating to easy access savings accounts, explaining their key features, benefits, and how they stack up against other options. We’ll also explore the situations where this account type could be a fit for your financial goals.
Whether you’re a seasoned saver or new to managing your finances, this guide is designed to equip you with what you need to know about easy access savings accounts.
What is an easy access savings account?
An easy access savings account is an account designed to offer both individuals and businesses a flexible way to save their money while earning interest. This account is characterised by its accessibility, allowing account holders to add or withdraw funds at their discretion without facing penalties or losing interest earnings. Easy access accounts can supplement the typically low-to-no interest current accounts used for daily transactions and the higher-yield, but less accessible, fixed-rate or notice savings accounts. However, individuals and businesses should consider the current interest base rate environment to determine what rate and account is best suited to them.
How do easy access savings accounts work?
Using an easy access savings account is straightforward – you can deposit or withdraw money at your convenience while earning a variable amount of interest.
At Recognise Bank, you can make deposits into your easy access savings account via a simple money transfer from your Nominated UK Bank Account.
Our easy access accounts offer a variable interest rate, which means they can fluctuate up or down. While most banks only pay interest annually, Recognise lets you choose how often you receive your earnings – monthly or annually – giving you more access to your finances.
Key benefits of easy access savings accounts
- Immediate fund accessibility: The primary advantage of easy access savings accounts is the ability to withdraw funds whenever you need them without incurring penalties or needing to give advance notice (subject to the account Terms and Conditions).
- Flexibility: Easy access accounts also offer flexibility, letting you add or withdraw funds based on your changing financial circumstances.
- Interest earnings: Easy access savings accounts also allow you to earn interest on deposited funds, making them a practical option for keeping short-term savings. Money can continue to earn interest and grow in value while you wait to spend or transfer it.
- Useful for emergency funds: Finally, easy access savings accounts can be an excellent vehicle for holding emergency funds, giving individuals and businesses quick access to cash in unforeseen situations.
Considerations when opening an easy access savings account
- Lower interest rates: The primary downside of easy access savings accounts is the lower interest rates usually offered when compared with fixed-term or notice savings accounts1.
- Variable rates: Interest rates on easy access savings accounts are usually variable. Therefore, the interest associated with the account can depend on a number of factors and potentially affect overall savings growth.
- Withdrawal limits: Some easy access savings accounts also limit the number of free withdrawals they permit or impose charges beyond a certain number of withdrawals. For example, you might pay fees for withdrawing money after the third time every month, impacting the flexibility advantage of these accounts. Customers of Recognise Bank do not need to worry, as we do not put in place any limits on the number of withdrawals from our easy access accounts, though Recognise requires a minimum amount of £1,000 to be held in the account at all times in accordance with the account Terms and Conditions.
How can an easy access account work for you?
You need easy access to funds
Easy access savings accounts are ideal for storing funds that you may need to access quickly.
You have short-term financial goals
Easy access savings accounts are useful if you have short-term savings goals where you anticipate needing access to your funds soon. For example, you might use them to save for a holiday or a big purchase.
You’re starting to save
Finally, easy access savings accounts are a good option if you are just beginning to save. These offer a straightforward way to grow funds while retaining access without worrying about unexpected emergencies.
Are easy access savings accounts good for businesses?
Easy access savings accounts can be a good option for businesses because of their flexibility, returns, and low cost to manage.
The principal benefit of easy access savings accounts for businesses is superior cash flow management. Companies are able to maintain regular access to their funds while earning interest. Easy access savings accounts can provide the flexibility of standard current account but with the benefit of returns.
The most commonly asked questions about easy access accounts
Here are some frequently asked questions and answers about easy access savings accounts.
Can I withdraw money from an easy access savings account at any time?
Yes, you can take your money out of an easy access savings account at any time. Some banks allow unlimited withdrawals while others give you a set number of free withdrawals and charge you thereafter. When you receive your funds can depend on when the instruction is received by your bank and is in line with the product Terms & Conditions.
Are there any fees associated with easy access savings accounts?
Most banks do not charge any fees for easy access savings accounts.
Is there a limit to how much I can deposit into an easy access savings account?
This depends on the provider and account you open with them. At Recognise Bank currently you can deposit between £1,000 and £85,000 (or up to £170.000 for joint accounts, or £250,000 on business savings accounts for Limited Companies and LLPs), into one of our easy access savings accounts.
There is a limit to how much of your money is protected by the Financial Services Compensation Scheme.2
How does the interest on an easy access savings account get calculated and paid?
Banks calculate interest payments on easy access savings accounts on a daily rolling rate. Then, they add the payments and pay them in a lump sum monthly, quarterly or annually. At Recognise, you can choose to have your interest paid monthly or annually.
Can I have more than one easy access savings account?
Yes, there is no limit on the number of easy access savings accounts you can open.
1Depending on current market conditions
2 Your eligible deposits with Recognise Bank are protected up to a total of £85,000 per person and £170,000 for joint accounts by the Financial Services Compensation Scheme, the UK’s deposit guarantee scheme. This means in the unlikely event that Recognise Bank were to fail or become insolvent, any deposits you hold below this limit will be protected under this scheme. For more information visit www.fscs.org.uk
Important information
This content is provided for information only and should not be treated as tailored financial advice for you. Please speak to an independent financial adviser or other financial professional before taking any decisions based on the information provided in this blog. You are responsible for your own financial decisions and neither the author nor Recognise Bank will be responsible for any losses, of whatever kind, that you might suffer as a result of you relying on this post.
