We all need an emergency savings fund, but that doesn't mean you should just put your money anywhere. As with any savings, it's important to make sure you're earning a decent rate of interest.
So here’s a round-up of the five best types of accounts for your emergency savings and which providers are offering the top deals.
Easy access savings accounts
Easy access accounts offer you a place to save which gives instant access to your money, though some providers limit the amount of withdrawals you can make each year.
The best easy access savings account on the market right now is the RCI Bank Freedom Savings Account.
It pays 1.1% on balances from £100 up to £1 million and allows you to make as many payments and withdrawals as you like. You can manage the account over the phone, online or by post and interest is paid monthly.
RCI Bank is part of the Renault group and has been offering accounts in the UK since 2015.
UK savings with RCI are protected under the European Economic Area (EEA) passport scheme. This means that in the unlikely event of RCI going bust, savers would rely on the French deposit protection scheme which protects the first €100,000 (£85,000) of savings per person.
Branch easy access savings
You may be able to get a better offer through a branch savings account. These accounts are offered by building societies for customers that live in the local area.
The best on offer right now comes from Newbury Building Society with its Existing Members Account.
This pays 1.6% on balances from £1 up to £1 million, however, you are only permitted to deposit £4,000 each tax year. The account is available to existing customers that have been members for at least one year.
New customers can go for the Newbury Building Society Welcome to Newbury account, which pays 1.35% on £50 upwards.
Both these accounts are only available to people living in these postcode areas: AL, BA, BH, BN, BS, DT, EX, GL, GU, HA, HP, HR, KT, LU, MK, NN, OX, PO, RG, RH, SG, SL, SM, SN, SP, SO, TA, TW, UB, WD and WR.
Easy access cash Isas
Savers can now get up to £1,000 worth of savings interest tax-free each year thanks to the Personal Savings Allowance. However, it’s still worth opening a cash Isa if you haven’t used up your allowance (£15,240 for 2016/17).
That’s because money saved in a cash Isa can earn an unlimited amount of tax-free interest not only now but in the future when rates get better.
An easy access cash Isa works like a normal easy access account, so can be a good home for emergency savings, although any money you put in and then withdraw can’t be replaced.
The Post Office Online Isa is the best easy access cash Isa deal around right now. It pays 0.9% on balances from £100 for 12 months. However, the rate drops to 0.25% after a year, so you should make a note to move your money somewhere better after this time.
Regular savings accounts
One of the best ways to build up a rainy day savings pot is to use a regular savings account. These allow you to save a certain amount each month.
However, as you’re only drip-feeding the money in, the amount of interest you earn isn’t as good as depositing a lump sum and to access the top rates you normally need to be a current account customer.
First Direct, Nationwide, M&S Bank and HSBC all offer a regular savings account paying a market-leading 5% interest, however they all require you to hold a current account and only Nationwide allows easy access to the cash without sacrificing the rate.
The best rate not linked to another account that allows withdrawals is the Virgin Money Regular E-Saver. The account pays a fixed rate of 2.25% and allows you to save from £1 up to £250 a month until 20 February 2018.
Current accounts that pay in-credit interest could be another destination for your emergency cash.
However, most require you to fund an account with a minimum amount, set up one or more Direct Debits and/or come with a monthly fee.
The Tesco Bank Current Account is one of the only current accounts that doesn’t have any hoops to jump through.
It offers 3% on balances up to £3,000 guaranteed for two years until April 2019. Tesco says an individual can have up to two accounts so a couple could potentially earn 3% on £12,000 across four accounts.