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Flexible Savings Accounts

If you have money you want to save in a safe place and want regular access to it then a Flexible Savings Account is designed with you in mind. Flexible Savings Accounts are accounts held with a bank where your savings are stored in a safe place and which you have easy access to withdraw the money at any time.

Flexible Savings Accounts can be opened with as little as £1.00; in some cases you can be as young as eleven years old to open the account. Many banks offer specialised children’s flexible savings accounts; these are accounts that are created to be opened by a parent, guardian, or grandparent who then act on the children’s behalf as a signatory on the account. Banks often provide incentives when opening children’s accounts such as free gifts of money boxes, stationery sets and gift vouchers.

One of the main advantages of opening a Flexible Savings Account is that you always have instant access to your money. The account provides you with the flexibility of being able to withdraw your money any number of times without any penalties. You also have the advantage of being able to take out your money when you want without having to give any notice to the bank.

To apply for a Flexible savings account it’s often best to speak with your existing bank first who will able to point you in the right direction. However, if you are certain that a Flexible Savings account is the right account for you then it’s easy to apply for the account to be opened via the preferred banks internet side. If you apply via the internet, you may be eligible to open an internet only savings account that doesn’t give you access to a branch service but will give you a higher interest rate on your savings.

Current Money Laundering regulations require banks to request that you are a UK Resident to be able to open a Flexible Savings Account. They also require banks to request forms of identification, usually in the form of a birth certificate and a utility bill to prove your current address.

When the account has been opened and is operational, you can manage your money in a variety of ways. Most banks issue passbooks to deposit and withdraw cash from, when this method is used, you will have to go into a branch, where the passbook will be updated to show how much money is being deposited or withdrawn and will then show your current balance.

With technological improvements, most banks can now offer an internet banking service; this also applies to savings accounts. It is now not necessary for you to have to manage your account at a branch, you can use the internet service to view balances or make transfers between accounts.

In some cases, Flexible Savings Account holders will be issued with a cash card, enabling the account holder to manage the account through a cash machine.

Interest on your savings will be calculated in the form of AER which is “Annual Equivalent Rate”. The AER will be set by each individual bank savings product; however, the AER is not fixed and can change in line with any changes made to the Bank of England base rate. The bank will usually pay the amount of interest earned on each account on an annual basis. The amount of interest payable to you is calculated from the set AER. When the amount of interest has been worked out, the payment of interest will be credited back to your savings account minus the relevant tax due on the interest.

All earnings from interest on Flexible Savings Accounts are tax deductible regardless of amount earned.

If you have large sums of money to save then the amount of interest you earn will be higher, however, this will in turn increase the amount of tax you have to pay on the interest earned. It may be worth choosing a different savings product if you have very high amounts to save.