IASA - Instant access savings account

The advantages of an IASA or instant access savings account

• An IASA will generally offer higher interest rates than that provided with a current account
   
• If you have some spare money in a current account that you rarely access but at the same time still may require immediate access for a ‘rainy day’, opening an IASA could be a profitable decision.
   
• Regular savings accounts, although paying slightly higher interest, often require a notice period. You may find that you have limited withdrawls per year or penalties on interest for removing money, an IASA avoids such restrictions.
   

What are the disadvantages of an instant access savings account?

• An IASA is not as practical as a current account for day-to-day transactions. This type of account is not usually used for paying bills or setting up direct debits. You will not be offered a cheque book or cash card. When moving money in an IASA this would typically be done through your current account with the bank.
   
• The term ‘instant access’ doesn’t always mean what you think. You have instant access to your money, i.e. there is no 30 days noticed period, however it may still take two to three working days for transferred money to clear.
   
• Interest earned on your IASA is taxed, if you have a larger sum of money you do not think you will need instant access to you should consider placing this money in a tax-free cash ISA.