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Our guide to savings

Thinking of saving or investing, but don’t know where to start? This guide provides an introduction to the various options available.


Post Office cash ISAs are provided by OneFamily. Savings in Post Office cash ISAs are deposited with Bank of Ireland UK. All other Post Office savings accounts are provided by Bank of Ireland UK

Before you choose a savings account, ask yourself:

1. How often will I need to make withdrawals?

Do you want instant access to your savings or would you be prepared to lock your money away for a fixed period of time? This could be anywhere between 30 days and three years. Usually the longer you have to wait before you can access your cash, the better the rate of interest you’ll receive.

2. How do I want to manage my savings?

Savings accounts can be managed either exclusively online, or by phone, post or in branch.  Usually accounts that can be managed exclusively online offer higher interest rates as savings made through reduced running costs are passed onto you.  We offer Savings  accounts that can only be managed online and accounts managed by phone, post or in branch.

3. How much do I want to save?

We have savings accounts you can open with as little as £1 or as much as £500. Some Post Office accounts allow you to save flexibly and regularly, others only allow you to deposit a lump sum upon account opening.

4. Do I pay tax on the interest I receive?

Since 6 April 2016, UK taxpayers have a new Personal Savings Allowance. In addition to this, Banks and Building Societies will no longer deduct Basic Rate Tax from savings interest. This means all interest is paid gross without the deduction of income tax. For more details log onto:

5. Should I open a cash ISA?

Each tax year you’re given a tax-free cash Individual Savings Account (ISA) allowance from the government to encourage you to save.  All the interest is completely tax-free which means you keep all of the interest your savings earn. Because of this, a cash ISA could be a great place to start saving if you haven't already used your cash ISA allowance for the current tax year.

6. Does income from ISAs count towards my Personal Savings Allowance?

No, income from ISAs does not count towards your Personal Savings Allowance.

Which savings account is right for you?

There are lots of different options when it comes to savings accounts. Here are some of the most common ones:

Fixed rate bonds

These have a fixed interest rate over a set period of time. They often offer a higher interest rate but you have to be confident you won’t need access to your money during the set time period. Post Office fixed rate bonds are called Online Bond and Growth Bond.

Instant access and easy access savings accounts

Ideal if you want to put some emergency funds away for example, but also want to be able to withdraw your cash whenever you need it, without paying a penalty.  The easy access savings account is called Online Saver whilst the instant access savings account is Instant Saver.

Regular savings accounts

With these accounts you have to commit to saving a regular amount each month for a year. However, there is no restriction on frequency of deposit. In return you’ll get either a fixed or variable rate of interest and you’ll be able to access your money should you need to.  We don’t currently offer these types of accounts but if you want to save regularly, try the Online Saver and Instant Saver accounts.

Individual Savings Accounts (ISA)

There are four types of adult ISA - cash ISAs (which can have a fixed or a variable interest rate), stocks and shares ISAs, innovative finance ISAs and Lifetime ISAs. You can only subscribe to one of each type of ISA each tax year. The limit for the 2022/23 tax year is £20,000.

With a cash ISA, you won't pay tax on the interest you earn and your savings will stay tax-efficient as long as you keep the money in an ISA. Cash ISAs are available as variable rate accounts or fixed rate accounts.

The interest rate on a variable rate cash ISA can go up and down over time whilst fixed rate cash ISA interest rates are guaranteed not to change for a fixed period.  Post Office offers fixed rate and variable rate cash ISAs both in branch and online. These are called Fixed Rate Cash ISA, Easy Access Cash ISA and Online ISA.

With a stocks and shares ISA you won’t pay UK Income Tax or Capital Gains Tax on any gains you may make. But it’s important to remember you may also not get all your money back, as you’ll be investing in stocks and shares and the value of these can go up or down.

With an innovative finance ISA you earn tax-free interest on peer-to-peer lending platforms. Although the growth potential could be higher than a cash ISA, the risks are also higher as the same protection does not apply.

The lifetime ISA is a tax-free savings or investments account to help 18 to 39 year olds buy their first home or save for retirement. Save up to £4,000 each year, and receive a government bonus of 25% – that’s a bonus of up to £1,000 a year. Conditions apply when withdrawing funds from a lifetime ISA.

Junior ISA


There is also an ISA available for children called a Junior ISA. These are a long term investment which can only be accessed by the child when they reach the age of 18.  They can be funded by a lump sum, regular direct debit, transferring an existing JISA or by transferring in an existing Child Trust Fund. You can invest up to £9,000 into a Junior ISA in the 2022/23 tax year (6th April to 5th April).

The tax advantages of ISAs depend on your individual circumstances and you should remember that the tax treatment may change in the future.


Fixed: A fixed rate of interest remains the same and doesn’t change for the duration of the term.

Gross: Gross rate means we will not automatically deduct tax from the interest we pay on money in your account. It’s your responsibility to pay any tax you may owe to HM Revenue & Customs (HMRC).

Tax-free: Tax-free means the interest paid will be free from UK Income Tax and Capital Gains Tax. The tax advantages depend on your individual circumstances and the tax treatment of your ISA may change in the future.

Variable: A variable rate of interest can go up or down throughout the lifetime of a savings account.