It’s been an interesting and competitive time for best buy easy access accounts since the introduction of Marcus by Goldman Sachs at the end of September.
This has led to a battle in the easy access best buy tables, as first Kent Reliance and later Virgin Money upped their rates to equal that of Marcus. And earlier this week, West Brom joined the 1.50% AER gang. Unfortunately, the Kent Reliance Easy Access account Issue 31, (paying 1.50% AER) was withdrawn yesterday, with the replacement issue (32) offering a lower rate of 1.40%.
Other providers who have not been brave enough to match the rate paid by Marcus have still been influenced by it, as more and more easy access account rates are increasing to competitive levels. RCI Bank* is the latest, this week upping its rate to a competitive 1.42% gross/AER.
However, not all easy access accounts offer the same access to your money, as a number of our readers have pointed out.
So, which should you choose? Do all easy access accounts offer the same benefits if rate is not the differentiator?
The short answer is no. As an example, while both the Virgin Money Double Take E-Saver Issue 10 and the West Brom Direct Double Access are paying 1.50% gross/AER, both only allow two penalty free easy access withdrawals per year – unlike Marcus which does not restrict the number of withdrawals that can be made without penalty. Therefore, if you want to ensure that you can dip into your savings whenever you need to, the Virgin Money and West Brom accounts are not appropriate.
Talking about easy access, just what does that mean? How fast can you get your hands on your money in an easy access savings account?
We know that many people leave their funds languishing with their high street provider for convenience, because it can, in some cases, take a few days to have your cash returned to your current account from your external savings account.
But, as Jeff Prestridge, Personal Finance Editor for The Mail on Sunday pointed out, the competitive streak is not likely to be adopted by the high street banks, who are paying, is some cases, just 1/10th of the best. So, rather than earning £750 on £50,000 deposited with Marcus, Virgin Money, or West Brom, assuming no withdrawals are made, you’ll earn just £75 with HSBC.
The good news is that, depending on who you choose and how much you are looking to withdraw, you might not have to wait for days. If your savings provider uses the 'Faster Payment' service, as well as your bank, the money could be transferred within a matter of hours or even minutes.
It’s important to check, as this information is not always upfront and sometimes the language is somewhat confusing.
For example, one provider explained the withdrawal process as follows;
"The payment will reach your Nominated Account no later than the end of the Working Day following the Working Day on which we receive your Payment Instruction, unless your Account is a Postal Account and we receive your Payment Instruction by post in which case the payment may not reach your Nominated Account until the end of the second Working Day following the Working Day on which we receive your Payment Instruction."
However, they do go on to explain…
"For example, if we receive your instruction at 10am on a Tuesday, the payment will normally reach your Nominated Account by close of business on the Wednesday unless your Account is a Postal Account in which case the payment may not reach your Nominated Account until the end of Thursday."
So that clears that up then!
Others are a bit more straightforward;
Marcus for example states;
"Payments from your Marcus account to your linked account are usually made within two hours and at the latest by the end of the following business day."
My personal experience of making a transfer from Marcus has been excellent – virtually instant!
Kent Reliance is even more detailed in its explanation.
"Money withdrawn from your account by electronic transfer will be processed in accordance with the below timescales.
Amount to be withdrawn (Requested prior to 3.30pm) Receipt timescales (Requested prior to 3.30pm) Up to £20,000 same day Over £20,000 under £100,000 next working day £100,000 and over (Bacs) Within 3 working days
If we receive a payment request after the 3.30pm cut off time or on a non-working day, your request will be treated as being received the next working day."
NS&I is a popular destination for many savers’ cash but your money is not quite as accessible as some of the accounts we’ve already mentioned and it depends on the account you choose.
"Withdrawals from Direct ISA, Direct Saver, Income Bonds or Investment Account up to £50,000
Online and phone
The payment will normally reach your nominated account by the end of the first banking day after the day we receive your instruction.
Withdrawals from other NS&I accounts (including Premium Bonds) and all withdrawals above £50,000.
Online and phone
When we receive your instruction on a banking day before 20:00, we’ll process it that day. The payment will normally reach your nominated account two banking days after that. If we receive your instruction after 20:00 on a banking day, or on a weekend or bank holiday, we will act as if we received it on the following banking day."
If you can’t locate the information, or it’s not clear, it makes sense to check with the provider what easy access actually means for its account – is it instant or could it take a couple of days – that small detail could make a very important difference.
The good news is that the entrance of Marcus to the savings market has ruffled some feathers and caused a definite increase in the competition amongst the best buys, even if no other providers have made any meaningful challenge. Nottingham Building Society launched its eSaver Instant Issue 9 paying 1.55% AER but it was only available for 2 days!
And the withdrawal of the Kent Reliance Easy Access account issue 31 shows that if you see a top paying account that you are interested in, apply as soon as possible as it might not be around for long.
If you’ve not already done so, sign up for our free Rate Alerts, so that we can inform you of new exciting accounts as they become available.
*We are occasionally paid by some providers if you click through from our Best Buy Tables and open a savings or current account with them. We will never accept a payment that compromises in any way our independent, whole of market approach to providing information on savings products. For clarity we will indicate those companies who remunerate us with an asterisk (*).
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