Easy access vs locked away
Lesson 5 of 12 in our free Saving & Emergency Funds guide: a 5-minute money game with the key points below.
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Questions you'll answer
Mo puts his ENTIRE emergency fund into a 2-year fixed account. What's the problem?
Quick facts
- Emergency fund → Easy access. Needs to be available fast.
- £2,000 you won't touch for 2 years → Fixed term. Locked in for a set time — often a better rate.
- Putting £50 in every month for a year → Regular saver. Regular savers are designed for monthly deposits.
- Money for a holiday next month → Easy access. Too soon to lock away.
- Fact: “Fixed-term accounts usually limit or penalise early withdrawals.” — That's the trade-off for a fixed rate.
- Myth: “Easy access accounts lock in their interest rate for as long as you keep them.” — Most easy access rates are variable and can change at any time — often after Bank of England rate changes.
- Fact: “Money in a UK-authorised bank is protected up to a limit if the bank fails.” — The FSCS protects eligible deposits up to £120,000 per person, per authorised firm.