Easy Access vs Fixed Rate Savings

Easy access savings and fixed rate savings both come with their unique benefits, but everything must be in perfect balance when finding the right account for you. Easy access savings work for when you want to save little and often and are more likely to dip in and out, like topping your savings up with any leftover funds at the end of the month but being able to use them when the dishwasher breaks, you’re planning a holiday or the car needs an MOT.

Whereas, fixed rate savings are generally for bigger goals, like a house deposit, investing in your career or a wedding – where you can tuck a larger amount away for a term (usually 1-3 years) to gain a fixed rate of interest on it, so you can know exactly how much you will have gained by the end.

As an example, if you choose to open a Fixed Rate Savings account with Charter Savings Bank, you won’t be able to access your funds until the fixed term agreed is completed. This means that this type of account is really only suitable for money that you won't require any time soon. It’s a great way to save your money, but you are committing to leave the money in the account for the agreed time period.

Comparing Certainty with Flexibility

Fixed Rate Savings accounts give you the security of the best interest rate for the whole term, which means you can plan and estimate exactly how your funds will grow, provided that you follow the account rules. With a fixed rate, you know exactly what to expect, which can be really helpful when planning your future finances.

Easy Access Savings Accounts and a variable interest rate.

The Easy Access Savings Account may increase or reduce the interest rate subject to its terms and conditions. The benefit is that you keep short-term access to your money instead of fixing it for a longer term.

It’s important though to consider a variety of factors when choosing the best account option. It's not just the highest interest rate that’s important; you should look at the minimum amount you need to invest, the maximum amount of money you can have in the account, how often interest is added and what happens if you need to take some money out.

The Annual Equivalent Rate (AER) is a very useful tool that allows you to compare different account options in both a fair and consistent way. It lets you know what the interest rate would be if the interest were added to your account and compounded once a year.

Could you use both an Easy Access Account and a Fixed Rate Account?

Lots of savers do not need to make an either-or choice when choosing which account is right for them; in fact, dividing funds across accounts can help separate short-term needs from longer-term plans. Keeping an emergency fund in easy access savings while placing money for a later goal into fixed rate savings can provide the best balance between access and certainty.

Frequently asked questions

Can I withdraw from a fixed rate savings account?

It really depends on what kind of product you're talking about. For example, if you have a fixed rate bond with Charter Savings Bank, you won't be able to withdraw your money or close the account until the fixed period is over.

Can easy access savings rates change?

Easy access accounts will usually have a variable interest rate; this means the interest rate can go up or down depending on the account's terms. The rate is not fixed, so it can change over time, which will affect the amount of interest you receive on your savings.

Is fixed rate savings always better?

Not necessarily; a fixed rate will offer certainty, but easy access may suit you more when you require flexible access to your money.

Is there a savings account that could do both?

If you want to lock your savings away to benefit from a fixed interest rate, but you aren’t sure you want to commit to a longer term, a Notice Account may be a better option for you. Not having access to your money can be worrying when you don’t know what will happen in the future, so depending on the terms and conditions, a notice account can offer a fixed rate of interest, but you can also give a specific period of notice to be able to withdraw your funds.

For example, with a Charter Savings Bank 60 or 95 day notice account, balances up to £5,000 still benefit from a fixed rate of interest, but you can request a withdrawal when you think you might need access to your money.

Are savings protected?

If you’re saving your money with a UK bank that's authorised, it may well be protected by the Financial Services Compensation Scheme (FSCS). This protection depends on the rules and limits that the FSCS has in place right now.

Next Steps

If you are considering your options as to which savings account would be most suitable for you, the following information may help;

Compare our current Easy Access Savings Accounts to see the latest features and eligibility requirements.

Or explore our Fixed Rate Savings Accounts if you're happy to lock your money away for a longer term.