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Have you noticed notice accounts?

Have you noticed notice accounts?

Category: Savings

Updated: 01/05/2014
First Published: 31/08/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Looking for a short term home for your savings? If you are then you've probably been looking at easy access accounts or maybe at a 1 year fixed rate bond.

But there is a third way. A way that you could earn more interest than on an easy access savings account, but without having to keep your money locked away for a year…

The humble notice account (where you have to serve a certain notice period before you can make a withdrawal) is seeing somewhat of a resurgence. At present the best notice account pays 3.35% - just 0.10% less than the top 1 year fixed rate bond, but 0.28% more than the best easy access account.

How the top notice accounts compare...


Rate

Details

Best 1 Year Fixed Rate Bond

FirstSave_116_x_28.gif
1 Year Fixed Rate Bond 21

3.45% AER

  • Open with £1,000
  • No early access or further additions
  • Manage your account online only
Best notice accounts

KRBS 60 Day Notice
Internet 60 Day Notice Issue 2

3.35% AER

  • Open with £1,000
  • Acess your money by giving 60 days' notice or loss of 60 days' interest. All withdrawal instructions must be made by post
  • Further additions allowed
  • Manage your account online only

Shawbrook Bank 120 Day Notice Account
120 Day Notice Personal Savings Account Issue 2

3.30% AER

  • Open with £1,000
  • Acess your money by giving 120 days' notice
  • Further additions allowed
  • Manage your account by post or in branch

KRBS 60 Day Notice
Postal 60 Day Notice Issue 2

3.25% AER

  • Open with £1,000
  • Acess your money by giving 60 days' notice or loss of 60 days' interest.
  • Further additions allowed
  • Manage your account by post only
Best easy access savings account

Internet Extra (Issue 7)

3.07% AER
(at £20K)

  • Open with £1
  • Rate includes 2.10% bonus for 12 months from £1 to £19,999. 2.57% bonus for 12 months from £20,000 to £1,000,000
  • Further additions allowed
  • No notice withdrawals
  • Manage your account online only

Correct as at: 31.8.12

Notice accounts: a happy medium

So the top notice savings accounts don't currently pay much less than the top 1 year fixed rate bond. But while the top notice rate is fractionally lower, you are able to access your money sooner than with a bond and make further additions to your savings.

Of course, it all depends on how much access you need to your money. If you're saving for a goal that will require you to get at your money quickly (buying a new car for instance) then an easy access account remains the best option - even if the rate isn't as attractive. However, for those savers who have been looking with dismay as the top fixed rate bond rates have decreased over the past couple of months, notice accounts may well have been increasing in appeal.

Notice savings accounts don't tend to have introductory bonuses, as is the case with the best easy access rates. That said, the notice rates are still variable - so have the potential to go down, particularly if the Bank of England base rate is cut. Here a 1 year fixed rate bond still has the distinct advantage of paying a guaranteed rate of interest over a set term.

What next?

Compare notice accounts
Compare 1 year fixed rate bonds
Compare easy access savings accounts
Savings search

More tips

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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