At a glance
- Notice accounts have conditions limiting your ability to access funds.
- Some notice accounts may impose penalties to access your funds faster than the agreed notice period.
Notice accounts require you to give advance notice to your savings provider before you withdraw funds. The amount of notice that needs to be given depends on the account you choose – they typically vary from 30 to 180 days – and complying with that notice period can mean you avoid incurring penalties, such as a loss of interest or closure of the account. These penalties could apply if you fail to give the necessary amount of notice, but bear in mind that not all accounts will allow this kind of early access.
Because of the restrictive nature of notice accounts, they tend to pay more than easy access varieties, though the time delay in receiving your money means they may not be best suited to an emergency fund.
These accounts can typically be operated via branch, telephone, post or online, although some specify that certain methods have to be used (e.g. branch-based or internet-operated accounts).
It's important to remember that if you choose an account which is operated by post, telephone or the internet, there may be a delay in receiving funds due to how these accounts are accessed. Some accounts may offer facilities such as a cash card or passbook.
What to consider when choosing a notice account
- Minimum balances - With some savings accounts there is a minimum amount you have to put in to open the account, and a minimum balance you have to maintain thereafter.
- Withdrawals - Some savings accounts have restrictions on the number of withdrawals that can be made over a certain time period, which may or may not correlate to a conditional bonus. If this figure is exceeded, interest can be lost.
- Unconditional bonuses - Some savings accounts include a bonus rate of interest until a certain time. These savings accounts can offer an attractive return from the outset, but can reduce considerably once the bonus expires, typically after 12 months. If you choose a savings account with a bonus it's worth reviewing the rate once the bonus term ends to check you're still getting a good deal.
- Rate guarantees - Some savings accounts will offer a guarantee on the rate of interest you receive, despite being a variable rate account. These often relate to the Bank of England base rate. Some rate guarantees have the same effect as a bonus.
- Conditional bonuses- These can include obtaining a higher rate of interest if you hold your current account with that provider, or if you do not make many withdrawals over a certain time period.
- Early access - Some notice accounts will let you access your funds early (i.e. without needing to give any notice), but this may come at a price, such as a loss of interest penalty.
How to find out more about notice accounts
Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.