Instant access savings accounts allow you to withdraw your money ‘instantly’ without penalty and without giving notice to the provider.
Most basic savings accounts are instant access. It is handy to have a basic savings account because you can use it to store excess wages during the month and earn more interest on your money than you would if you left it in a standard current account (for more information on this see our article ‘Out of money by the end of the month? Then read this!’).
Interest rates are variable for these types of accounts.
The advantages of having instant access are as follows:
• You can access your money as and when you need it
• No notice is required so your money will be available in emergencies
• You can have a cash-point card which means even better access
• The account can often be opened with as little as a £1
• If the Bank of England base rate increases, so will the interest rate applied to your money
These types of accounts may not be suitable for everyone, however, because of the disadvantages:
• The interest rate applied to these types of savings account is lower than that applied to most others
• If the Bank of England base rate falls, so will the interest rate applied to your savings
• Instant access means it will be easier to dip into your savings therefore it may take a long time for them to grow
Instant access savings accounts work well for very short-term savings. You could trying having an instant access account for your spare monthly cash and then at the end of the month move any leftover spare cash to a longer-term savings account.
- What is a savings account?
- Savings accounts and interest rates
- Tax and UK savings accounts
- Opening a savings account
- Adding money to a savings account
- Accessing money in a savings account
- Regular savings accounts
- Instant access savings accounts
- Online savers
- Individual savings accounts (ISAs)
- Helpful links for further savings information