Is a locked savings account or an ISA better for me?
A locked savings account is a good option if you won’t need access to your money, but want to grow a lump sum. An ISA may be a better option for you if you think you’ll need access to your money or if you want to add to it on a gradual basis, rather than deposit a lump sum.
How do I choose the best locked savings account for me?
A locked savings account might be the right choice for you if you want the reassurance that your savings are safe. The best no access savings account for you will depend on how much you’re looking to earn, how long you’re able to lock your money away for and how much you have to deposit.
Which locked savings accounts have the highest interest rates?
Longer term locked or no access savings accounts, such as 5 year fixed rate bonds, usually offer the highest interest rates, but this is not always the case. It’s worth shopping around and comparing no access accounts from different providers to get the best deal.
Are locked savings accounts my best fixed term savings choice?
Locked savings accounts, or fixed rate bonds, can be a great investment if you’re looking to deposit your money into a savings account, as they typically offer more competitive interest rates than other types of savings accounts, such as easy access or notice accounts.
With locked savings accounts, your money is locked in until your bond matures at the end of the term, so you may only want to consider opening one if you know you won’t need to access your money in the medium to long term.
Can I withdraw money before the end of my term?
You usually won’t be able to withdraw money early, and you’ll likely have to pay a penalty which could negate the interest you’ve earned. Your provider could also penalise you by reducing your interest rate. The penalty will differ depending on your provider, so it’s always best to check before signing up.
Can I top up a locked savings account?
Not usually, as the ‘no access’ stipulation works both ways. The amount you deposit upon opening the account is typically the only time you will pay in.
How do I pay money into my locked savings account?
The only time you’ll typically pay money into your account is when you make your initial deposit. If you’d prefer a type of savings account that allows you to make regular deposits, locked savings accounts may not be suitable for you.
How much money can I open a locked savings account with?
You can open some locked savings accounts for as little as £1, however most accounts require a £1,000 deposit minimum. To earn the most from your money, you’ll probably want to invest as much as you’re comfortably able to.
How many locked savings accounts can I open?
There is no restriction on how many locked savings accounts you can open. There are, however, limitations on each account that you’ll need to adhere to, such as access restrictions and investment criteria. You’ll also need to monitor your income so that it remains below your personal savings allowance, or make a note of how much it goes over by so that you can file it with HMRC.
Will I risk losing my money with a locked savings account?
No – locked access savings accounts are a safe option. The Financial Services Compensation Scheme (FSCS) protects deposits of up to £85,000 per person, per UK regulated banking group under British banking regulations, so your money is safe up to that amount.
If you want to deposit more than £85,000, you might want to spread it between no access accounts from different banking groups.
Are there any alternatives to locked savings accounts?
There are other options available if you want to invest your money for growth, however, they typically carry more risk than a no access savings account. If you’re comfortable with risk, you may want to consider investing.
