Definition and Types of Savings Account

A savings account is a specialised account provided by a bank, building society or the Post Office® designed for medium to long-term investment of capital. Withdrawing or depositing funds is usually free but savings may not be immediately accessible, particularly from those accounts which offer the highest interest rates (see Interest Rates). Unlike a current account, savings accounts do not usually offer quick access to funds, for example via ATM cash withdrawals, or payment options such as chequebooks or debit cards, although there are exceptions to this rule. In addition, the types of services associated with current accounts such as arranged overdrafts, standing orders, direct debits and direct salary deposits are not typically available with a savings account.

In the UK there was previously little competition between savings accounts, with most offering the same or very similar facilities and rewards. Nowadays, most savings accounts cater for a specific customer group and their particular needs, such as for young people, pensioners or the self-employed. For more details on the types of savings accounts available, see Instant Access Savings, Medium to Long-Term Savings, Online Savings Account, Savings Accounts for Children and Other Savings Accounts.