A look at instant access savings accounts

Bank customers are allowed to invest £10,680 per year into instant access savings accounts and can receive annual interest above the Bank of England’s base rate.  People can also withdraw their money whenever they want or increase their yearly allowance. Furthermore, people with an ISA can transfer their savings into another account that may offer higher rates.

Companies offering generous returns for one year fixed rate accounts include Northern Rock and Leeds Building Society, each paying in 3.2 and 3.25 percent respectively. Northern Rock accepts customers with a minimum deposit of £500 and allows them to transfer any funds from previous years. Meanwhile, Leeds Building Society allows a minimum deposit of just £1, although it does not permit transfers from former accounts.

For variable rate options, Northern Rock also offers an AER of 3.05 percent for accounts with a minimum deposit of £1. The AA provides the same percentage of interest in addition to a 1.35 percent annual bonus. However, customers must deposit at least £500 into their account and are not permitted to transfer old money from previous ISAs.

Any money that is invested in an ISA of a company that is under UK regulation is protected under the Government’s Financial Services Compensation Scheme. This law guarantees up to £85,000 of savings for each ISA, however, customers with more than this should store their money with other institutions in the unlikely event that a bank goes bust. It must be stressed that institutions regulated from foreign countries are not covered by UK compensation laws.

United Kingdom - Excite Network Copyright ©1995 - 2021