Guide to savings accounts

6. Accessing money in a savings account

This section explains issues surrounding when and how you will be able to access your money once your savings account is up and running.

When

Savings accounts have rules regarding when you are allowed to access your money. In some instances once your money has been placed in a savings account you will not be able to access it until the end of a set period of time without being penalised by losing interest. In others you can access your money as and when you please.

When going to open a savings account, be sure to check the access options and consider if they are suitable for your individual needs.

Instant access savings accounts

If an account is classed as being ‘instant access’ it means you can access your funds whenever you like without losing out on your interest payment for that month. However, you will pay for this convenience by accepting a lower interest rate.

Notice accounts

These savings accounts are usually designed for larger sums of money that you won’t need back in a hurry because you need to warn the bank or building society before you withdraw funds.

Notice accounts pay higher rates of interest than instant access savings accounts. The longer the notice period that you are willing to give, the higher the interest rate you will receive.

If you fail to give the agreed amount of notice, then you will lose interest.

Bonds/Term accounts

Bonds/Term accounts are types of savings accounts which involve you agreeing to leave your money untouched for a set amount of time, normally between one and five years. In return for this guarantee you will be awarded a much higher interest rate than on other types of savings accounts.

Once you have opened a bond you are not normally allowed to add to your initial deposit. Additionally, most providers will not allow you to access your money before the bond 'matures' (comes to the end of the bond agreement). If the provider does allow a withdrawal, you will normally be penalised by losing interest.

Interest rates are normally fixed for the whole of the bond agreement (from opening until maturity).

How

You can access your money in the same ways as you can deposit it i.e. by telephone, online and over the counter.  You can also access the funds at a cash point (using a card, but only with some types of savings accounts).

Card or no card?

Some banks will increase (or even double) your interest rate if choose not to have a card for the account. They do this because, without a card, you will not be able to withdraw funds from a cash point which means you have less access.

You need to consider how much of a loss this would be for you. If you already have a savings account and have a card that you have never ever used, ring up your bank and tell them this and they will tell you what can be done as a result. You will probably be offered a telephone savings or an online savings account so if you need to transfer funds you will have to ring up or log on. You can still make deposits over the counter.

If you have problems disciplining yourself when it comes to leaving your savings untouched then not having a card could make it easier for you.

If, however, you don’t have the internet and like the fact that you can access your savings with a card, you would need to weigh up the benefits of the extra interest against losing something that makes your life easier.

---

• Next page: Regular savings accounts
• Previous page: Adding money to a savings account
•  

Guide contents

1. What is a savings account?
2. Savings accounts and interest rates
3. Tax and UK savings accounts
4. Opening a savings account
5. Adding money to a savings account
6. Accessing money in a savings account 
7. Regular savings accounts 
8. Instant access savings accounts 
9. Online savers
10. Individual savings accounts (ISAs) 
11. Helpful links for further savings information