The best instant-access savings rates

lovemoney staff
by Lovemoney Staff lovemoney staff on 17 April 2014  |  Comments 14 comments

Instant-access accounts mean you can get your hands on your money easily, but many rely on big bonuses to boost the initial rate of interest. Here are the top ones right now.

The best instant-access savings rates

It’s hard to know where to put your savings to get the best return on your money at the moment.

Savers have been suffering from the effects of the record-low base rate for a few years now, but locking up your cash to get a decent rate is not a sacrifice many are willing to make with such an uncertain economy.

The trusty instant-access savings account could be your best bet if you need your cash in a hurry and have reached your Cash ISA limit (currently £5,940 rising to £15,000 from 1st July)

But even rates on these accounts have been falling recently, due in part to the Government's Funding for Lending scheme meaning banks and building societies are less dependent on raising cash by attracting savers.

Therefore it's worth looking at the whole of the savings market before you open an account as you could get a higher rate in a fixed-rate savings account – if you're happy with having your money locked away.

With an instant-access savings account, you can add to your savings pot and (usually) withdraw the money at any time. Because of this flexibility banks typically offer lower rates compared to fixed-rate accounts, but you still get a better return than if you did nothing.

Compare savings accounts with lovemoney.com

Bonuses

When it comes to instant access saving, you can either go for an account with a bonus, which boosts your interest rate (usually for about a year), or opt for a gimmick-free account with no bonus, just an upfront interest rate.

The bonus rate makes the advertised offer look that little bit juicier. But as soon as the period is up banks will revert dump you onto a far less attractive rate.

It's not a problem if you are happy to shop around and switch accounts regularly but if you can't be bothered, then an instant-access savings account with no bonus is a better option.

Top instant access accounts with a bonus

Account

Interest rate (gross AER)

Minimum deposit

Withdrawal limits

Bonus

Post Office Online Saver (Issue 11)

1.30%

£1

None

Rate includes 0.40% bonus fixed for first 12 months.

AA Internet Extra (Issue 15)

1.20%

£1,000

 

Rate includes 0.70% bonus for the first 12 months.

Tesco Bank Internet Saver

1.20%

£1

None

Rate includes 0.45% bonus fixed for first 12 months.

Santander eSaver (Issue 11)

1.00%

£1

None

Rate includes 0.5% bonus for the first 12 months

Post Office Instant Saver

1.00%

£500

None

Rate includes 0.90% bonus for the first 12 months

TSB eSavings

1.00%

£10,000

None

Rate includes 0.80% bonus for the first 12 months

So there are no accounts that come close to breaking through the 2% mark; in fact, most pay well below this threshold.

Even with the top rate of 1.30% you won’t beat inflation (the Consumer Prices Index stands at 1.6% currently), so putting your cash in this type of account means you’re effectively losing money.

Read Where to find inflation-beating savings rates

Compare savings accounts with lovemoney.com

Top instant access accounts without a bonus

Account

Interest rate (gross AER)

Minimum deposit

Withdrawal limits

Britannia Select Access Saver (Issue 4)

1.50%

£500

Four penalty-free withdrawals a year

Yorkshire BS Triple Access Saver

1.40%

£100

Three penalty-free withdrawals a year

Newcastle BS Sir Bobby Robson Foundation Saver (Issue 5)

1.25%

£1

None

Virgin Money Easy Access Saver (Issue 10)

1.25%

£1

None

Yorkshire BS Internet Saver

1.25%

£1

None

Nationwide Limited Access Saver

1.25%

£1

Five penalty-free withdrawals a year

Leeds BS eSaver

1.25%

£100

None

State Bank of India Instant Access Savings Account

1.25%

£500

None

NS&I Income Bonds

1.25%

£500

None

Kent Reliance Easy Access Savings Account Issue 8

1.25%

£1,000

None

The main benefit of opening an account without a bonus is knowing that 12 months down the line you're unlikely to see your interest rate plummet. However, your interest rate could be cut anyway as they are variable, so make sure you keep an eye on your account.

Note also that the highest-paying account has limits on the amount of penalty-free withdrawals you can make in a year.

Compare savings accounts with lovemoney.com

Current account alternatives

At the moment some of the best rates on easy access savings can actually be found in a current account.

The TSB Classic Plus Current Account is paying a market-leading 5% on balances up to £2,000.

The Nationwide FlexDirect Current Account also pays 5% but on larger balances up to £2,500. However, you should bear in mind that the rate on this account drops to 1% after 12 months.

Elsewhere Lloyds Bank offers the Club Lloyds Current Account which pays 4% on balance between £4,000 and £5,000.  While the Bank of Scotland Classic Account with Vantage pays 3% on balances between £3,000 and £5,000.

For larger pots the Santander 123 Current Account pays 3% in-credit interest on balances between £3,000 and £20,000.

This article is regularly updated to reflect the latest rates

Compare savings accounts

More on savings:

The UK's best Cash ISAs

The top fixed rate savings bonds

NS&I to cut rates on old accounts

The best regular savings accounts

 

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Comments (14)

  • NevMeg
    Love rating 4
    NevMeg said

    Where's First Direct monthly saver offering 6% with a maximum of £300 a month for 12 months?

    Report on 31 July 2013  |  Love thisLove  1 love
  • george19a
    Love rating 29
    george19a said

    Quite right NevMeg.

    First Direct only gets a mention as the consumers first choice, but its products are passed over as being unrewarding. In addition to the monthly saver, I am in my third year at £300 a month, take a GOOD look at their ISA. Ok, so you need to transfer in a hefty sum, but where else can you get 3%?

    Sadly Love Money, like all the other financial web pages, need interpretation and you accept there wisdom as gospel at your peril.

    Have a nice day

    Report on 31 July 2013  |  Love thisLove  0 loves
  • John Fitzsimons
    Love rating 43
    John Fitzsimons said

    NevMeg and George19a

    This article is about easy access savings accounts. The First Direct account isn't an easy access account - it's a regular saver. You can't access your cash at all until the account comes to the end of its term in 12 months. That's why it wasn't mentioned at all in this article.

    John

    Editor

    Report on 31 July 2013  |  Love thisLove  0 loves
  • trevski2001
    Love rating 14
    trevski2001 said

    Just had a look at the First Direct site ... it seems as though you can only have a regular saver account with them if you also have a current account with them, and for that they will charge you £10 a month if certain terms and conditions aren't met ... so probably not a good choice for most of us.

    Report on 03 August 2013  |  Love thisLove  0 loves
  • new investor
    Love rating 0
    new investor said

    Having a current account with ICICI is not mandatory to open their super saver account. They have an online version and a branch based version. Online version does not require having a current account with them. Its mandatory only for their branch version. Interest rates for both of them is the same. I've recently opened an account with them online and thats, how I am pretty sure.

    Report on 03 August 2013  |  Love thisLove  0 loves
  • andrewjameshowar
    Love rating 26
    andrewjameshowar said

    Icici Supersaver is not open to new investors at present. There are other errors in this rates table (mainly accounts which have announced a forthcoming reduction). Do your research carefully - eg play with the advanced search options un Moneysupermarket.com.

    Report on 16 August 2013  |  Love thisLove  0 loves
  • Ken Rich
    Love rating 15
    Ken Rich said

    Why don't you do more research on your figures. The NS and Post Office rates are set to drop dramatically within the next three weeks.

    Report on 17 August 2013  |  Love thisLove  0 loves
  • Simon Ward
    Love rating 8
    Simon Ward said

    andrewjameshowar, The ICICI restrictions were put in place after this article was sent out via email.

    Ken Rich, I can't find confirmation the Post Office rates are dropping soon anywhere. And by NS, I presume you mean Nationwide? We've removed the e-Savings Plus now.

    Best wishes

    Simon

    Report on 19 August 2013  |  Love thisLove  0 loves
  • rick184
    Love rating 3
    rick184 said

    It's worth checking what a credit union can offer. I'm in an employee based CU and getting over 3%. Check what CU you can join at www.abcul.org.

    Report on 30 October 2013  |  Love thisLove  0 loves
  • coloratura
    Love rating 81
    coloratura said

    The banks must be well..."laughing all the way to the bank" with interest rates at 1-00% and less and indeed in some cases 0% so the best thing to do now is to forget about saving but just go out and spend it and have a good time - just keep enough for a rainy day that is all.

    Report on 31 October 2013  |  Love thisLove  0 loves
  • grannymabe
    Love rating 2
    grannymabe said

    Also consider ICICI's HiSave Supersaver instant access account which pays 1.6%, no bonus and you can manage it online. ICICI don't seem to figure in your comparison tables - any reason why?

    Report on 31 October 2013  |  Love thisLove  0 loves
  • grannymabe
    Love rating 2
    grannymabe said

    Sorry, I've just read the 'hidden' posts covering the ICICI HiSave account.

    Report on 31 October 2013  |  Love thisLove  0 loves
  • DaveK1020
    Love rating 5
    DaveK1020 said

    Or you could go to Lloyds and open a vantage current account that pays up to 3% gross and requires a monthly £1000 deposit. You can get this interest rate on a maximum of £5k. Open three accounts and put in £15k and then set up a standing order to transfer £1k from account 1 to account 2 and 2 to 3 and 3 back to 1. Hey presto 3% gross interest and instant access. Why bother with a savings account?

    P.S. You can also do a similar thing with the current accounts at Santander for 3% and a total of £40k!

    Report on 29 December 2013  |  Love thisLove  0 loves
  • savingswatch
    Love rating 0
    savingswatch said

    Since the split of LLoyds and TSB you can have 3 accounts with each bank

    Report on 21 January 2014  |  Love thisLove  0 loves

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