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Christmas savings boost: notice account rates hit six-year high

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25/09/2018
Notice accounts, which offer higher interest rates than standard easy access accounts but still let you get your hands on your money, are paying the best returns in six years.

The average notice account rate has hit 1%, the highest since November 2012, and 0.32% more than a year ago, according to data from Moneyfacts.

What’s more, 78% of these accounts, which require you to notify your provider every time you want to make a withdrawal, beat 0.75% (the current base rate), compared to just 34% of the easy access market.

The shortest notice period on these types of account is 30 days but some require as much as 120 days’ notice.

These accounts may be a good alternative to fixed rate bonds which pay higher interest but typically require you to tie your money up for a year or more.

They could also be a practical option for Christmas savers, according to Rachel Springall, finance expert at Moneyfacts.

She said: “As it is now three months to the day until Christmas, savers will need to start planning how to cover the expense of the festive season and a notice account can be a great help to save regularly, without the temptation to dip in and spend the money like you could with an easy access account.”

“There are even some 60-day notice accounts paying more than the best easy access accounts, such as the 60 Day Notice – Issue 23 from Kent Reliance paying 1.49% per annum (pa) with interest paid monthly (1.50% yearly).”

If savers are looking to put some money aside to use post-Christmas, Oaknorth pays 1.77% pa with interest paid monthly on its 90-day notice account, Sharia compliant bank Gatehouse Bank pays an expected monthly profit of 1.76% pa on its 95-day notice account, and Secure Trust Bank pays 1.75% pa with interest paid quarterly on its 90-day account.

Springall added: “Clearly there is lots of choice for savers who missed out on opening a fixed term regular saver last year and now only have a few months until the expensive festive period. Thankfully, notice account providers can accommodate these savers and its easier for them to manage the flow of funds with these accounts too.”

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