Together, we Brits have more than £900 billion in easily accessible accounts, ideal to dip into when we need to raid our savings.
When we listen to financial advisors, we keep about three to six months’ salaries there.
Now an easy-access account is becoming increasingly popular: the limited-access deal.
Last week, Paragon came out with a new version that took it to the top of the best buy tables.
Limited access accounts allow you to withdraw funds two to four times a year.
Get 5.78% interest with this 365-day notice account that beats the best one-year fixes
Popular: Limited access accounts allow you to withdraw funds two to four times a year. You can go over the limit, but then your rate will drop for the rest of the year
You can exceed this limit, but your rate will plummet for the rest of the year. Or you may have to close the account to get more of your money.
For example, you could keep £5,000 in a regular, easily accessible account that you can tap into as you see fit (shoes! theatre! paddleboard!).
But for everything else, including planned expenses like flights and vacations or a new car, these limited-access accounts can serve you well.
Providers also benefit because the money is more likely to remain in the account than in a regular, easy-to-access account.
The Paragon Double Access Account Issue 7 pays 5.05 percent, is available online with a minimum of £1,000, and offers you two withdrawals every 12 months.
At 3.11 percent, it is well ahead of the average regular easy-access account, say data auditors at Moneyfactscompare.
You can make more shots, but if you do, you will pay a high price for it. For the rest of the year, your rate drops to 1.5 percent.
Once the 12 months are up, your rate resets to the higher rate on the anniversary of your account opening.
Yorkshire BS pays 5 per cent on its Rainy Day Saver account on balances up to £10,000. You can withdraw as much money as you want, but only on two days per year.
If you want to earn more, you can close the account.
Some regular, easy-to-access accounts pay more than 5 percent. The new Oxbury Bank Easy Access Limited Edition is 5.02 per cent, but you must keep at least £20,000 in the account.
Savers can expect this rate to fall when the Bank of England’s base rate falls from the current 5.25 percent, which could be as early as June 20.
Supermarket banks ready to pay
When Tesco Bank and Sainsbury’s Bank arrived on the scene almost thirty years ago, they threatened the big banks.
Suddenly you could do your weekly shopping online, by telephone or even do your weekly shopping.
But they stopped operating in the store years ago and will continue to withdraw. Sainsbury’s Bank this week made massive cuts to the fixed-rate bonds it offers to new customers. The two-year interest rate for new savers has been reduced from 4.2 percent to 2.5 percent.
The variable rates for new accounts have also fallen by 0.9 percentage points. The cash Isa rate has fallen from 4.4 per cent to 3.5 per cent.
The Bank of England kept the base rate at 5.25 percent, so it is difficult to see the cuts as anything other than a reduction in savings.
Meanwhile, Barclays is in the process of acquiring Tesco Bank and plans to offer Tesco-branded savings products.
Sy.morris@dailymail.co.uk