What are the different types of savings accounts?

A savings account is an interest-bearing account held at a bank or other financial institution (e.g. a building society).

Savings accounts can offer a fixed or variable interest rate, be fixed term or easy access, or held solely or jointly. There are many different options to choose from.

We’ve outlined the most common types below:

An easy access savings account allows you to access your money at any time. These are a popular option with savers who don’t want to tie their savings up.

Shawbrook offers two types — a standard easy access account and an easy cash ISA (Individual Savings Account).

A standard easy access account will typically offer a higher rate of interest than a current account. With Shawbrook’s easy access account, you can make an unlimited number of withdrawals (subject to a minimum withdrawal amount) without giving notice.

An easy access cash ISA has the benefit of a tax-free allowance. You can save up to £20,000 in an ISA in the current tax year without paying tax. Once again, you can make as many withdrawals as you like without giving notice (subject to a minimum withdrawal amount).

Why choose an easy access account?

Easy access accounts offer more flexibility than fixed term accounts. You can withdraw your money at any time, so this can be a good option if you don’t know when you’ll need access to your cash. Because of this, you can also use them to hold emergency funds.

Easy access cash ISAs have the added benefit of tax efficiency.

You’ll likely earn a lower interest rate with an easy access account than you would with a fixed account. But you’ll probably earn more interest than leaving your cash in a current account.

For more information on the accounts Shawbrook offer, visit our easy access savings page.

With a notice account, you can only access your money after a pre-agreed notice period. The notice period is how long you’ll need to wait to receive funds after you’ve informed your provider you want to make a withdrawal.

Notice accounts are available with different notice periods which will vary depending on the lender. At Shawbrook, we offer accounts with two notice periods — 45 days or 120 days. You need to let us know when you want to access your money, and we’ll send you the funds in either 45 or 120 days, depending which account you have.

Why choose a notice account?

A notice account may be your best option if you know in advance when you’ll need your money — perhaps if you are saving for a purpose, such as buying a house or paying for a wedding.

Notice accounts are not suitable if you need instant access to the money for emergencies, but they offer more flexibility than fixed term accounts.

For more information on the notice periods we offer, visit our notice accounts page.

With a fixed rate bond, also known as a fixed term savings account, you agree to put your money away for a set period in exchange for a guaranteed interest rate.

The length of time your money is tied up depends on your account’s term. At Shawbrook, we offer fixed terms ranging from one to seven years.

Why choose a fixed rate bond?

A fixed rate bond will likely offer a competitive interest rate. As the interest rate is fixed, you can guarantee how much interest you’ll earn at the end of the term.

Anyone taking out a fixed rate bond must be sure they will not need access to the funds before the end of the term. They are therefore unsuitable for emergency savings. It’s also important to check your terms and conditions. Fixed rate Cash ISAs will have a 14-day cooling off period. However, standard fixed rate bonds don't have a 14-day cooling off period like some other products so you can't change your mind once you've opened an account. It’s important to check the terms of the product before applying.

For more information on our product range, visit our fixed rate bonds page.

A cash ISA is a tax-free savings account. You can pay up to £20,000 into a Cash ISA during this tax year.

Cash ISAs are available as easy access or fixed term. The interest rates and terms offered will vary between providers.

At Shawbrook, we offer one easy access cash ISA and various fixed term cash ISAs, with terms ranging from one to seven years.

Why choose a cash ISA?

Many people choose a cash ISA because of the tax-free allowance. This allowance is renewed each tax year. So, you can save up to £20,000 per year (based on current allowances) and earn interest on your cumulative savings without paying any tax.

If you can set your money aside, a fixed term ISA may be right for you. These will usually offer a competitive, fixed interest rate.

If you want the tax-free benefits of a cash ISA without the commitment of a fixed term, an easy access cash ISA may be the best option. The rates will likely be lower and variable but you can access your savings when you need to. However, it’s important to remember the yearly limit on ISA investments. Any money that you withdraw and reinvest will count towards your annual limit.

For more information on our award-winning Cash ISAs, visit our cash ISAs page.

There are also other types of ISAs that we don’t currently offer at Shawbrook, such as stocks and shares and lifetime ISAs. You can find out more about these in our ISAs explained guide. Keep up to date with what ISAs are available by visiting gov.uk.