New market-leading easy access account

If you need to keep your savings within arms' length, then there's a new best buy to consider.

Savers who want easy access to their cash have been given a boost, with the launch of a new market-leading easy access savings account.

West Brom Building Society has released the WeBSave EasyAccess 3, an account paying 3.17% AER per year to savers, a rate which includes a 1.42% unconditional bonus until the end of October next year.

Jumping hurdles

However, for there are a few hurdles to consider. Firstly, the account needs a minimum investment of £1,000. So this isn’t going to be a great account for savers who are still in the early stages of building up their savings stack.

And then there’s the fact that you’re only allowed to make four withdrawals per year, without sacrificing interest. Any further withdrawals will result in a charge equal to the loss of 90 days’ interest on the amount withdrawn.

This is something that does aggravate me a little about easy access accounts. The name suggests that getting hold of your cash should be easy, not that by doing so you may be chucking away potential interest.

The best easy access savings accounts

Nonetheless, it’s the best rate of interest you’ll manage to secure from an account that gives you instant access. Here’s some of the other top savings accounts in the market today:

*Must have qualifying current account

**Must pay Child Benefit directly into account

As you can see, West Brom Building Society is not alone in stretching the definition of easy access by limiting access to your cash. In addition, the vast majority of these accounts offer a fairly significant bonus for the first 12 months, meaning that in a year’s time it will be very important for you to shop around to see if you can get a better rate.

Of course, these rates aren’t exactly high, particularly when you consider that you’ll be paying tax on any returns you do get and inflation is at 4.4%.

So do ISAs provide a decent alternative?

Saving tax-free with an ISA

ISAs allow you to save absolutely tax-free, with the taxman unable to touch a single penny on the interest you earn on your cash. You are limited though in how much you can save – no more than £5,340 a year in cash.

So how do the best accounts compare to easy access savings accounts? Here are some of the best cash ISAs offering access to your cash.

So again, the rates are nothing to shout about, though the fact that you won’t have to pay tax on any of your returns does mean that saving in an ISA like this will generally see you better off (if you're a taxpayer) than you would be saving into one of the easy access accounts I’ve listed above.

Lock it away, get a better rate

The fact remains that if you need to have access to your cash, you sacrifice getting a better rate on your savings. If you’re happy to lock your money away for a couple of years, then the rates on offer do start to look a fair bit more enticing.

For example, if you can put your cash away for three years, you can get ISAs paying a fixed rate of 3.60%, ensuring a far better return than keeping your cash in an easy access account. That said, I’d be very wary about locking my money up for much longer than a year or so – once base rate starts moving up, who knows how quickly a rate of 3.60% will start to look uncompetitive?

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