Best Notice Savings Accounts

How does a notice account work?

Notice savings accounts are a kind of compromise between the flexibility offered by easy access accounts and the strict conditions of fixed rate bonds.

Most notice accounts allow you to add to your savings without restriction. However, unlike easy access accounts, you won’t be able to instantly withdraw funds from a notice account.

Instead, you will need to give notice when you want to make a withdrawal and wait until the end of the notice period to receive your money. Notice periods can range from as little as seven days to as many as 180 days, with periods between 30 and 90 days being particularly common.

Often, accounts with a longer notice period pay a higher interest rate, but this isn’t always the case.

The interest rate on a notice account is usually variable, which means the rate could go up or down.

If the provider drops the interest rate, they will give you notice about the change. As a minimum, for many providers, this will usually be the length of the notice period you have for withdrawals, but could be a shorter period.

How to withdraw from a notice savings account

When you want to withdraw from a notice account, you need to wait the specified period of time before you can receive your money.

For example, if you have a 30-day notice account, you won’t be able to access your money for 30 days after requesting the withdrawal. Similarly, if you have a 90-day notice account you need to wait 90 days.

The money you’ve requested to withdraw may continue to earn interest during the notice period.

Note that, when you request a withdrawal, you need to specify the amount of money you want to withdraw and you’ll only be able to access this sum after the notice period.

Bear in mind that some providers may only allow one notice period to run at one time. This means that, after requesting a withdrawal, you won’t be able to request another withdrawal until the notice period ends and you have received your money.

Some providers allow you to withdraw your money immediately, without waiting for the end of the notice period. While this can be useful if you need to access your savings in an emergency, this will typically come with a penalty, such as a loss of interest equivalent to the notice period.

Depending on the management methods offered by an account, you can request a withdrawal online, by mobile app or by post, for example.

Can you add money to a notice account?

Most providers will allow you to continue to deposit into a notice account and add to your savings without restriction.

This is different to a fixed rate bond which typically only allows you to make deposits when opening the account, or for a limited time afterwards.

How to choose a notice account

When choosing the best notice account for your situation, it’s worth thinking about the following points:

• What is the interest rate? This is crucial as it determines how much of a return you’ll get on your money. Even a slightly higher rate can make a notable difference, so it’s worth comparing accounts to make sure you’re getting a competitive return.
• How long is the notice period? If you want the reassurance that you can access your money relatively quickly, you can choose an account with a short notice period. However, if you’re happy to provide a longer period of notice, these accounts may pay a higher rate of interest. Accounts with a longer notice period can be useful if you want to use your savings for a specific goal (such as a holiday, wedding or house deposit) as you can request the withdrawal in advance to make sure you have the money by the time you need it.
• Does the provider allow you to access your money before the end of the notice period and, if so, what is the penalty? Certain providers may allow you to withdraw your money immediately, without waiting for a notice period. This can be a useful back-up option if your plans change, or you need to access your money to cover an emergency expense. However, earlier access usually comes with a penalty charge such as a loss of interest. Bear in mind that some providers don’t allow earlier access, so always check the terms of an account before opening if this is an important factor for you.
• How is the interest paid? Notice accounts can pay interest monthly, yearly or on anniversary, for example, so you can choose the option you prefer. Monthly interest accounts can be useful if you want your savings interest to act as a supplement to your income.
• What is the minimum opening deposit required? Some providers may allow you to open a notice account with a deposit of just £1, whereas others may require a more substantial deposit of £10,000 or more. Make sure you choose an account that has an appropriate deposit requirement for your situation.
• How can you open and manage the account? This is important as there’s no point opening an online-only account if you want the option to speak to the provider in person or over the phone. You can view the opening and management methods offered by an account to make sure you choose one that has your preferred options.
  Check the terms and conditions of a notice account before opening it to make sure it’s right for you.

Alternatives to a notice savings account

If a notice savings account isn’t right for you, it’s worth considering other types of savings accounts to see if they could be more suitable.

• Easy access accounts: These are likely to be a good option if you want to be able to withdraw money from your savings immediately, without waiting the length of a notice period.
• Fixed rate bonds: If you’re confident you won’t need to use your savings for a number of months or years, a fixed rate bond may pay a higher rate. And, unlike notice accounts, the rate is fixed and won’t change for the length of the term. You can take out a fixed bond for terms of one-year or two-years or, if you’re willing to lock your money away for longer, there are terms of three-years, four-years and five-years available.
• Regular savings accounts: These could pay a higher rate than notice accounts, but they typically come with stricter terms and usually require you to make a minimum deposit every month.
• Individual savings accounts (ISAs): ISAs are similar to savings accounts, but the key difference is that any interest you earn on an ISA is tax-free. As a result, they may be worth considering if you’re concerned about breaching your Personal Savings Allowance (PSA) and being taxed on your savings interest.

You can choose from easy access ISAs, notice ISAs and fixed ISAs, depending on your preferences. If you opt for a fixed term, you can decide between terms of one-year, two-year, three-year, four-year or five-year and the rate won’t change for this period. Alternatively, Lifetime ISAs can be an option if you want to save up for your first home or for retirement.