Instant Access Savings Accounts The Pros And Cons

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Many of us hold a savings account with a bank or building society as well as a current account. Whether you need to save up for a mortgage deposit, home improvement or new car, savings accounts provide you with a safe and secure place to keep your money, as well as get interest added to your account balance. One of the most popular types of savings account is an instant access savings account. These provide you with easy and often immediate access to your money. So whenever you need it, the cash is available with no penalty for early withdrawal.

Savings accounts will typically have interest added, and this is measured as an Annual Percentage Rate or APR. The APR can be set by the bank or building society according to various factors. The type of account, the present financial market, and supply and demand for savings accounts all influence the APR you will receive on your savings. Generally, the APR for an instant access savings account will be more than a current account but less than other types of savings accounts, especially those where access is limited.

Whatever amount you choose to save, an APR is simply a measurement of what you would earn for any sum of money if it were held in the account for a year. So if the APR was 5%, then for every £100 in your account held for a year you would receive £5 of interest per year per hundred pounds. As an incentive, savings accounts providers pay a higher rate of APR for larger amounts of savings.

The easy access element of an instant access savings account means that the bank or building society could be spending more time processing payments, which would cost it money for staff hours and resources. So if you're looking to keep your money in the account without regularly taking it out, it could be an incentive to look for a savings account that pays a higher rate of interest but puts limits or conditions on the amount of times in a year or over several years you can withdraw cash. You might get a lower interest rate on an instant access savings account, but it will mean you can get to your money easily.

Interest rates can differ significantly between instant access savings accounts. This means that shopping around is essential to get the best interest rate, as it could mean the difference of hundreds or even thousands of pounds of interest per year as the difference in interest you would get in the various instant access savings accounts available. A convenient and comprehensive way to find out the best interest rates available is to use an Internet comparison web site.

Going online to compare instant access savings accounts is easy to do and can save a lot of time. Comparison sites are free to use and will often provide extra hints on tips on getting the best deal, as well enabling you to take advantage of special features and offers by choosing your instant access savings account through their web site. One of the best things about using comparison sites for instant access savings accounts is that you are getting either the same or more information than you would by spending hours visiting high street banks, but in a fraction of the time.

Article Source: http://depositarticles.com/

Max Bartley is interested in a plethora of finance topics like savings accounts. Next on his plan are further reviews on different financial subjects like insurance options and loans.

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