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A lot of attention goes to easy access accounts and fixed rate bonds, yet notice accounts, which sit somewhat in the middle, have a lot to offer. In fact, our latest figures show that they now offer rates that are a lot higher than a year ago, making them certainly worth your consideration.
Notice accounts can pay higher rates of interest than easy access accounts in exchange for a certain number of days' notice before you withdraw funds. Now, the top six best notice accounts not only all pay higher rates than the top easy access deals, they also beat last year's top notice account rate.
Not only that, but the top rate of 1.65% gross (1.66% AER) seen today marks the highest return available since Al Rayan Bank paid an expected profit rate of 1.80% in June 2016. "It's reassuring to see improvements in the notice account market at a time when many savers may not want to invest their cash for a year or more," commented Rachel Springall, finance expert at moneyfacts.co.uk.
13 Mar 2018 - best notice accounts
|Provider and term||Gross rate at £10k|
|Secure Trust Bank (180 Day)||1.65%|
|Secure Trust Bank (120 Day)||1.55%|
|Paragon Bank (120 Day)||1.55%|
|Milestone Savings (120 Day)*||1.53%|
|Al Rayan Bank (90 Day)*||1.50%|
|Manchester BS (120 Day)||1.50%|
* This is a Sharia'a compliant account, so the rate displayed is the expected profit rate.
|Provider and term||Gross rate at £10k|
|Secure Trust Bank (90 Day)||1.34%|
|Secure Trust Bank (120 Day)||1.19%|
|Paragon Bank (120 Day)||1.15%|
|Charter Savings Bank (95 Day)||1.05%|
|United Trust Bank (100 Day)||1.05%|
|Charter Savings Bank (60 Day)||1.01%|
It's not just the top accounts that have improved, as additional data shows that 81% of notice accounts currently pay more than the base rate figure of 0.50%, while a year ago just 50% managed this. There are now even 13 more providers with notice accounts compared to a year ago, as Rachel suggests that providers might be looking outside of a "saturated easy access market".
The benefits of these accounts for providers are clear, as Rachel explains: "Due to the penalty incurred by accessing cash early (if permitted), savers can be reluctant to withdraw cash before the notice period, which means that banks can keep a sturdy eye on what is on their balance sheets, and for how long."
But with a base rate rise expected, there are clearly also advantages for savers. If rates were to increase across the board in a few months' time, notice account savers would only need to give their provider some notice before accessing their funds to take advantage of the better rates, while fixed rate bond savers could have to wait a year or more.
Although the top rates may require as much as 180 days' notice, Rachel points out that "notice periods tend to start at 30 days and can go up to six months, so savers have lots of choice, depending on what they are looking to save towards. They just need to keep in mind that these accounts offer a variable rate of interest, which could change at any time."
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