Happy to wait for access to your savings? Consider a notice account paying 1.81%


Happy to wait for access to your savings? Take notice of these accounts paying up to 1.81%

  • Fixed-rate bonds have been slashed while easy access accounts pay 1.5% at most
  • There is a decent middle ground in the form of a notice account
  • In return for requiring you to let the bank know in advance that you need to access your savings, these lesser-known accounts offer a rate of up to 1.81%

Savers who are searching for a better deal should consider the little-known notice account.

The best notice account currently pays 1.81 per cent — compared with a top 1.5 per cent for an easy-access deal.

The catch is that you are required to give your bank or building society up to 120 days’ warning before making any withdrawals — which means you must be organised.

If you don’t mind tying your hands by forcing yourself to give a bank notice that you want to access your savings, notice accounts will give you a better interest rate than easy access deals

Many savers have no idea these accounts still exist after all major High Street banks scrapped them.

And as savers facing interest rate uncertainty poured money into easy-access accounts, which now hold £753 billion, cash in notice accounts and fixed deals tumbled by 10 per cent to £167 billion.

But notice accounts are making a comeback, with three new accounts out in just the past week. They are increasingly becoming a firm favourite among new banks and building societies, with online, postal and branch deals available. As a general rule of thumb, the more notice you are willing to give, the higher the rate.

These are variable, but if they fall, providers must let you quit the account early without sitting out the required notice period.

Charter Savings Bank’s new account, available online, pays 1.81 per cent. You must give 95 days’ notice before making a withdrawal.

This compares with a top easy-access rate of 1.5 per cent, which includes a 0.75 percentage point bonus for the first year, available from Cynergy Bank.

Investec Bank even allows savers immediate access to some of their money — in return for a slightly lower rate. For example, the standard rate on its 65 day-notice account is 1.5 per cent. But if you decide you need immediate access to 10 pc of your money, it’s 1.45 per cent.

You can also opt for easy access to 20 per cent of your money for a slightly reduced rate. If you don’t make any withdrawals from your account for 90 days, you qualify for a small 0.05 percentage point loyalty bonus.

On 95-days’ notice the rates are 1.8 per cent and 1.75 per cent. On 35-days’ notice you’ll earn 1.4 per cent and 1.35 per cent respectively.

If you prefer to run your account by post, the new Mansfield BS 60-day account pays 1.35 per cent. Its 90-day account pays 1.4 per cent including a 0.25 percentage point bonus payable for the first 12 months.

If you want branch access as well as post, Saffron BS’s 30-day account and Chorley BS and Market Harborough BS’ 60-day accounts all pay 1.35 per cent. Kent Reliance offers 1.4 per cent on 60 days.

All smaller banks and building societies are covered by the Financial Services Compensation Scheme (FSCS) as usual.

This scheme protects deposits worth up to £85,000 — or £170,000 on joint accounts — in the event of a bank failure.

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