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