nigel woollsey

Nigel Woollsey

Online Writer
Published: 24/06/2019

As recently as two weeks ago, some websites were trumpeting notice accounts as the ‘inflation-beating’ products of choice for investors looking for good returns. However, now that rates for all the top notice accounts have fallen below May’s 2.01% inflation figure we ask if they are still the best option for middle of the road savers?

Nothing stands still in the finance sector for long. Just like the apex-predator of the oceans, the shark, it seems that savings products have one rule: keep moving or die. But in this constantly fluid environment, where can the smart investor go to find a safe, semi-permanent home for their hard earned savings?

For many people, notice accounts occupy the temperate zone in between the sparse, interest-rate poor stretches of instant access and the frozen fund tundra of the long-term bond.

Who offers the best rates for notice savings accounts?

Currently, the top of the Moneyfacts.co.uk notice account comparison table is dominated by deals that demand a minimum investment of £1,000. The best interest rates for these notice savings accounts currently range from 1.92% AER for the Secure Trust Bank 90 Day Notice Account to 1.85% AER for the PCF Bank’s 180 Day Notice Deposit Issue 1, as per the table below:

Product

Rate AER

Notice

Min investment

Interest paid

Gatehouse Bank 120 Day Notice Account

1.87%

120 Days

£1,000

Anniversary

Gatehouse Bank 120 Day Notice Account

1.87%

120 Days

£1,000

Monthly

Gatehouse Bank 95 Day Notice Account

1.85%

95 Days

£1,000

Anniversary

Gatehouse Bank 95 Day Notice Account

1.85%

95 Days

£1,000

Monthly

PCF Bank 180 Day Notice Deposit Issue 1

1.85%

180 Day

£1,000

Anniversary

Leading the pack now is the 90 Day Notice Account from the Secure Trust Bank, paying a top return of 1.92% AER variable with interest being paid quarterly. With this account you can make up to four interest withdrawals per annum without penalty or three capital withdrawals over the same period on 90 days’ notice. In addition, you can make further additions to the £1,000 minimum deposit up to a maximum total of £1m. This must be opened online while ongoing management can also be by phone too. The relatively short notice period and chart-topping interest rate make this an attractive option for many savers.

Gatehouse Bank has a choice of online-only 120 Day and 95 Day Notice Accounts paying profits on either a monthly or an anniversary basis.  The 120-day version has a slightly better expected profit rate of 1.87% AER variable while the 95 Day option pays 1.85% AER variable. All these Gatehouse Bank products have a maximum deposit limit of £1m.

The final notice savings account in our list is from the PCF Bank. This pays 1.85% AER, from a £1,000 investment, the same as Gatehouse Bank’s accounts, but requires a longer notice period of 180 days to avoid penalties for withdrawals. The maximum investment is also lower at £250,000 but further additions up to this figure are allowed. Interest is paid on the anniversary of opening, making this product less suitable for people looking to generate some extra income on a monthly basis.

 

 

 

 

How do notice savings accounts work?

Notice savings accounts typically offer a higher rate of interest than available for an easy access savings account. They do this as customers opening a notice account do so on the basis that they will give a set amount of days’ notice of their intention to withdraw any funds. Withdrawing funds without giving this notice can result in severe penalties, including loss of capital, interest and even forced closure of the account.

Notice accounts offer an attractive safe harbour for savings for those who can put away a sum without having to draw on it quickly. Even withdrawals are possible without penalty providing the account holder gives the period of notice required. Better still, having no restrictions on making further deposits during the term, these accounts tend to be more flexible than longer-term bonds, where both withdrawals and further additions are often not permitted at all. Of course, you must look carefully at what restrictions are in place and balance these against the interest or profit rate being offered.

In terms of notice accounts, there is a wide latitude as to exactly how much ‘notice’ you will be required to give on withdrawals. Generally, these tend to range from around 30 days (one month) to 180 days (six months), with higher interest rates being paid for longer notice periods. However, currently in our notice account charts, the top performers have between 90-day to 180-day notice periods – meaning you don’t have to go for the longest times to get the best interest rates.

What are the best rates for notice ISA accounts?

At the moment, the top notice ISAs that are available without restrictions pay 1.50% AER. However, it should be remembered that these are tax-free savings accounts (so long as you stay within your personal ISA limits). Currently the best notice ISAs are:

Product

Rate AER

Notice

Interest

Min investment

Buckinghamshire Building Society 180 Day Cash ISA

1.51%

180 Days

Monthly

£100

Buckinghamshire Building Society 180 Day Cash ISA

1.51%

180 Days

Yearly

£100

Coventry Building Society

1.50%

None

Yearly

£1

Coventry Building Society

1.50%

None

Yearly

£1

Should I open a notice account?

Notice accounts – whether savings or cash ISA products – represent a good trade-off between flexibility and getting the best possible interest rate. However, if you can lock your money away for a full 12 months, then you could also consider a one-year fixed rate bond instead. Currently the top paying one-year fixed rate bond is offering an expected profit rate % AER.

If you are interested in notice accounts, or another form of savings product, then Moneyfacts.co.uk makes it easy to find exactly what you want – simply go to our notice account page and select the elements that are important to you. If you still have questions then you’ll find the Moneyfacts’ guide to notice accounts explains everything you need to know in an easy-to-read format.

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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