NatWest pulls top instant access savings account

As the top easy access savings account disappears, and rates across the board plunge, is there any point in an easy access account?

Blink and you miss it; a little over a week ago NatWest launched a market-leading easy access savings account paying 2.85%. Sadly this competitive rate was short-lived and has now been dropped, just over a week after launch, to a paltry 1.0%.

It wasn't alone, as other accounts at the top of the best buy tables a week ago have been cut or withdrawn.

The Derbyshire NetSave Issue 6 paying 2.75% has been replaced with Issue 7 which pays a much smaller 2.5%. The same reduction has been implemented by Nationwide Building Society with its My Save Online Plus. Skipton Building Society’s Online Bonus Saver that paid 2.60% has been withdrawn. And most recently the ING Direct Savings Account has taken another cut from 2.50% to just 2%.

The most recent changes have left savers with very little variety when it comes to easy access savings accounts.

Here’s a roundup of the only decent rates I could find out there at the moment.

Top instant access accounts available now

Account	Interest Rate Gross AER	Minimum deposit	Withdrawal limits	Access	Bonus
West Brom BS WeBSave Easy Access 5	2.52%	£10,000	Four withdrawals allowed per year	Online	Rate includes a 1.0% bonus fixed until December 2013
Allied Irish Bank (GB) Easy Access Account Issue 3	2.50%	£1	None	Post or phone	None
Saffron BS E-Saver Issue 6	2.50%	£10	None	Online	None
Derbyshire BS Derbyshire NetSaver Issue 7	2.50%	£1,000	None	Online	Rate includes a 1.50% bonus fixed until February 2014
Nationwide BS MySave Online Plus	2.50%	£1,000	One free withdrawal per year	Online	Rate includes a bonus of 0.97% fixed for 12 months
Tesco Internet Saver Account	2.40%	£1	None	Online	Rate includes a 1.15% bonus fixed for 12 months
Post Office Online Saver	2.35%	£1	None	Online	Rate includes a 0.70% bonus fixed for 12 months
Newcastle BS Sir Bobby Robson Foundation Saver Issue 2	2.35%	£1	None	Online	None
Principality e-Saver Issue 8	2.30%	£1	None	Online	None
Aldermore Easy Access Issue 4	2.25%	£1,000	None	Online, phone or post	None

West Bromwich Building Society’s WeBSave Easy Access 5 which pays 2.52% is the new table topper. But the headline rate is only available if you have £10,000 to open the account.

With research from HSBC recently revealing that eight million UK households have less than £250 put away, this particular account is not going to help the large number of savers with modest pots.

Allied Irish has the most reasonable proposition after West Brom with an account only needing a £1 deposit to get access to a rate of 2.50%. That said the rate can be found with a variety of banks and building societies at the moment so isn’t exactly special.

So where else can savers go?

Notice accounts

If you’re prepared to give up some access the rates do improve and they aren’t all in fixed rate bonds - notice accounts are looking very attractive at the moment. Here are five that look particularly juicy.

Account	Interest Rate Gross AER	Minimum deposit	Notice	Access	Bonus
Post Office Reward Saver	3.00%	£500	30 days	Branch, post, phone	Rate includes 1.25% bonus fixed for 12 months
Hanley Economic BS Postal 180 Day Notice- Issue 2	2.75%	£5,000	180 days	Post	None
Aldermore 60 Day Notice Issue 2	2.70%	£1,000	60 days	Online, phone or post	None
Hinckley & Rugby BS 90 Day Notice Postal Account	2.65%	£2,500	90 days	Post	None
Bath BS Direct 60 Issue 5	2.60%	£2,500	60 days	Post or online	None

Overall the rates on offer here are much better than what can be found with an easy access savings account at the moment. I like to think of notice accounts as the middle ground between easy access and fixed rate bonds - where you give up a little access and flexibility to get a better rate. Sometimes the rates between the two don't differ too much, but currently the better deals are plain to see.

The Post Office offers a cracking 3.0% for a reasonable £500 investment. What’s even better is that the notice period isn’t too long - all you need to provide is 30 days’ warning in order to get access to your cash.

This short timeframe isn't always the case though. Hanley Economic Building Society provides a good rate of 2.75%, but you have to give a whopping six months’ notice if you want to make a withdrawal. You’re able to access money without notice, but this incurs a penalty loss of 180 days' interest.

What about peer to peer?

You may have also heard of peer-to-peer savings. It’s a type of investment that cuts out the banks to get you access to higher rates by giving you the opportunity to lend your money directly to businesses or individuals needing a loan.

Usually peer-to-peer savings run across one- to five-year terms, but RateSetter has a monthly scheme, which offers a current market rate of 3.1% - including fees and bad debt.

You can start lending from as little as £10 and access the whole sum of your cash plus the interest at the end of the month or roll it over to keep it invested.

lovemoney.com editor John Fitzsimons is testing the monthly savings option out. Read: Why I've started saving with RateSetter to see how he gets on.

The wild card

One account that could leave you better off is Buckinghamshire Building Society’s Chiltern Gold Escalator which builds to a rate of 4.0% over a year providing an AER of 2.85% in the first year.

This account is not traditionally easy access, because if you touch the pot you have to start building the rate again. But you can if you need to with little penalty apart from a rate drop.

If you like the sound of it check out this story: Buckinghamshire launches savings accounts with rising interest rates.

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