Savings explained: what different savings accounts are there?

Navigating the variety of savings accounts available to you can be time-consuming and confusing. 

From easy access (also known as instant access) to fixed rate bonds, it can be difficult to know which one is going to help you meet your savings goal. 

What types of saving accounts are there?

The good news is we are here to help; below, we’ve broken down the different types of savings accounts on offer and explain what this means for you and your money. 

For those looking for complete freedom: easy access accounts

Easy access savings accounts do what they say on the tin: they allow you to access your money at any time and provide the highest level of flexibility. You can touch your money as much as you like and usually do not incur any fee for doing so. This does, however, mean you should expect a slightly lower rate of interest than what you would get for limited access and fixed rate accounts. However, for the unlimited freedom it is the perfect account for someone looking to save at their own pace with peace of mind their money is there if they need it. 

If you’re looking for an easy access account, take a look at our Welcome to Newbury product. Available to open online, via post and in branch, our flagship savings account is designed for those who haven’t opened an account with us in the past six months. With a minimum opening balance of £50, you can deposit up to £3000 and after a year, you have the opportunity to move to an Existing Members account. 

For those looking to save for a specific reason: restricted access accounts

Also known as ‘regular savings account’ or ‘monthly savers, restricted access requires you to deposit a certain amount each month with limited withdrawals per year. In return, you are usually given a higher interest rate than you’d get with an easy access account. Such an account is great for those who don’t want to invest a huge lump sum in one go but would like to make their money work harder; ideal for those looking to get into a regular savings habit. It is also an effective way to save for a specific reason such as a house deposit, for example.

Our Home Saver savings account does just that and is perfect for those with a specific savings goal in mind. This means that once your money has been deposited, it is locked away until you need it. You also have to deposit anything from £10 - £500 on a monthly basis to keep the account activated so a regular savings habit is required. It may sound like a big commitment but don’t worry, you can access your cash twice a year in case of an emergency. 

For those with a long term savings goal: fixed rate account

Fixed-rate bonds tie up your nest egg for a specific length of time while your fixed rate interest is accumulated. Such savings accounts can extend over one and two years with some banks and building societies also offering three, four and five year fixed bonds. 

The rule of thumb is the longer you are willing to lock your money away, the higher your return will be. However, by doing so, you give up the right to access your money for the agreed timeframe. You might be allowed to withdraw your funds in an emergency, however, be prepared to pay a hefty fee. If you’re confident you won’t need the pot of cash, this is a good option for you. 

For those looking for tax efficient savings: ISA

Individual Savings Accounts (ISA) can be one of the best ways to make the most out of your money. The interest is free from tax, so all the interest you earn, you keep. There’s a limit to how much cash you can deposit into your ISA. For the tax year starting 6 April 2023 the ISA allowance is £20,000 for cash or Stocks and Shares ISAs and £9,000 for Junior ISAs.

For under-18s: children’s accounts

Children’s savings accounts are more or less the same as ‘adult’ ones on the market and tend to be open access.

In addition, Junior ISAs is another option for tax efficiency. Children can currently save up to £9,000 per tax year and can only access the money when they turn 18 years old. As they do not pay tax on the earnings, the money you put away for your child can grow even faster. 

Our Young Saver savings account is a great starting point to encourage children to learn and manage money; great for increasing their overall financial awareness. It is easy access and can be opened with just £1. 
Remember: when you are researching savings accounts, check the terms and conditions.

Read our article ‘Four things to consider before opening a savings account’ for further information on how to start (or improve) your savings journey.

If you have any questions about our savings accounts or would like to open one with us, pop in to your local branch or contact us by using our online form and one of our qualified savings advisers will be in touch.

A full list of our savings accounts can be found here

*all figures and data correct as of September 2023

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