Due to there flexibility during a time of economic uncertainty, instant access savings accounts have been recommended by experts as viable ways for savers to put aside their money this year.
The instant access nature of these accounts means customers can withdraw their funds without penalty if the need arises. As a result savers can avoid being penalised for switching accounts if a new offering with a more attractive interest rate is announced.
The Post Office currently tops the best buy tables with its 2.9 per cent instant access savings account. With a minimum balance of £1 the after-tax rates for basic rate and higher rate taxpayers are 2.32 per cent and 1.74 per cent respectively.
However that 2.9 per cent rate contains a one year bonus rate of 1.25 per cent. At the end of the first 12 months, consumers will need to move their funds from the account or face their interest rates dropping through the floor.
Savers with savings accounts through the Post Office can also rest easier now that the Financial Services Compensation Scheme now covers them from the 1st of January. Licence-holder for the accounts Bank of Ireland, has been scrutinised closely recently due to fears of economic turmoil in Ireland. In the event of a financial catastrophe involving the bank’s collapse, the FSCS would compensate up to £85,000 of savers’ deposits.
For savers who feel that the risk is simply too high, there are other personal and business bank account providers with competitive instant access savings offerings on the market. One example of such an offering is Norwich & Peterborough Building Society’s E-Saver 4 savings account, which offers its customers a rate of 2.8 per cent before tax. Included in this 2.8 per cent rate is a one year bonus rate of 1.6 per cent.