Saving should be simple — not something you have to second guess. In our books, that means instant transfers, earning more interest on your everyday money, and easy access to your savings whenever you need them. No hidden catches or restrictions.
But, although many accounts call themselves easy access, that’s not always the case. Withdrawal limits and delays can leave you short when you need your money most — whether it’s for an unexpected bill, a quick top-up, or last-minute plans.
That's why Spring has partnered with personal finance expert Andrew Hagger from Moneycomms.co.uk to take a closer look at what “easy access” savings really means in practice, so you can avoid getting caught out. Below, Andrew looks at some of the common pitfalls to watch out for and explains how to make sure your savings are working for you when it matters most.
This article is a paid collaboration with Moneycomms.
When easy access isn’t really that easy
By Andrew Hagger, Personal Finance Expert from Moneycomms.co.uk
It’s important to have some savings behind you as it gives you access to funds you can draw on in case of an emergency or if faced with an unexpected expense.
Yes, you could use your credit card to get you out of a fix, but if you can’t clear your statement balance in full, you’ll suddenly be faced with interest costs of 25% to 30% as the norm.
An easy access savings account is a great vehicle for your emergency savings nest egg, as it tends to offer great flexibility as and when you need it.
Typically, an easy access savings account has a variable interest rate (unlike fixed rate savings bonds); however, the beauty is that you can pay in as often as you want, and in most cases withdraw money without penalty at any time you choose.
The problem for many people is knowing what the ideal account to plump for is, as there are more than 300 easy access savings products to choose from.
You would think simply picking the account with the highest interest rate would be the way to go, but unfortunately, it’s not that straightforward.
Some easy access accounts have strings attached which can make them less appealing or suitable for some savers.
Some products restrict the number of withdrawals you can make each year
The ‘easy access’ label on a comparison site or newspaper best buy table can sometimes be a little misleading. Some of the higher paying accounts may limit or restrict you to a specific number of withdrawals in a twelve-month period – in some cases only allowing as few as one withdrawal per year. So, it’s not really comparing apples with apples.
Beware of short-term bonus rates
Another area to watch out for when choosing a home for your easy access savings is that some of the top rates and best buys include a short-term bonus element in the rate.
While the initial headline interest rate may appear attractive, when the bonus expires, your rate can drop dramatically, leaving you with a poor paying deal and the need to shop around for a better rate. Let’s face it, savings are essential but life events could mean you’re unable to arrange an alternative deal at the time the rate reverts to the lower deal.
No need to switch your current account to bag a good savings deal
Another issue is that some savings deals are only available if you’re a current account holder with that provider – again, who really wants the hassle of switching bank accounts just to get a decent savings rate?
Most people have had the same bank account for many years and are reluctant to change it – what you want, in an ideal world, is a separate savings account which allows you to transfer money between accounts immediately and without any fuss or delays.
The Spring Easy Saver account uses the latest open banking technology which makes it easy to move money to and from your existing current account, while giving you a more competitive rate than many high street bank easy access savings deals.
Easy access doesn’t necessarily mean instant access
Another thing to consider is how quickly you can get your hands on some or all of your cash if you need it.
I’m sure most people assume that easy access means you can transfer money to your bank account immediately, but sadly in many instances this isn’t the case, with some providers making you wait two or three days – that’s certainly not what I’d call easy access.
We commission Moneycomms research in February of this year that showed that 67% of the 50 highest paying easy access savings accounts come with a restriction. This includes an imposed cut off time for same day withdrawals and not offering ‘same day’ Faster Payments transfers which are typically instantaneous or within a maximum of 2 hours at the outside.
For savers this could mean delays of two or three days over a weekend, not ideal if you need the cash urgently.
In summary, I hope you appreciate that not all easy access savings accounts are the same. It’s worth checking the terms and conditions carefully before signing up to ensure you get a flexible unrestricted ‘no strings’ account with a decent interest return.
Easy access, the way it should be
We hope Andrew’s insights have shed some light on what easy access really means, and what to watch out for when choosing where to keep your money.
At Spring, we believe easy savers should be as straightforward as they sound too. It’s why our Easy Saver grows your money effortlessly and lets you withdraw money whenever you like. No fees, no penalties.
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