Money Tips
Notice accounts remain resilient as rates on other savings products tumble
While rates on easy access and fixed term accounts have been falling, the notice account market has been fairly robust.
Savers who are happy to lock their money away to get a better deal may want to consider a notice account as rates have risen year-on-year while the number of short notice period deals has also increased.
Overall, fixed bond rates remain higher than notice account rates, but with a fixed term account, you can’t access your money for at least a year and rates have also been falling in recent months.
Notice accounts, on the other hand, let you get hold of your money within a matter of months. And rates have been going up.
In fact, the average notice account rate stands at 1.13% – the highest since October 2012 when it was 1.19%, according to Moneyfacts figures. This is also a vast improvement on the 1.01% average rate recorded in October 2018.
As a comparison, the average one-year and 18-month fixed bond rates have fallen to 1.30% and 1.52% respectively, down from 1.44% and 1.88% in October 2018.
There are also more notice accounts on the market compared with a year ago – 175 versus 154 – and more top rate deals requiring a shorter notice period than a year ago, according to the data.
Most of the deals in the top six require 95 days’ notice, whereas there was only one deal with this term in the top six a year ago.
The top notice account is the 120 day account from Gatehouse Bank, which pays an expected profit rate of 1.82%.
The next best deal is the 95 day account from Investec Bank, which pays 1.79%.
| 29 Oct 2018 – Top notice accounts | 29 Oct 2019 – Top notice accounts | |||
| Provider and term | Gross rate at £10,000 | Provider and term | Gross rate at £10,000 | |
| Charter Savings Bank (95 Day) | 1.81% | Gatehouse Bank (120 Day)* | 1.82% | |
| Paragon Bank (120 Day) | 1.80% | Investec Bank plc (95 Day) | 1.79% | |
| Secure Trust Bank (180 Day) | 1.80% | Gatehouse Bank (95 Day)* | 1.75% | |
| OakNorth (120 Day) | 1.79% | United Trust Bank (200 Day) | 1.75% | |
| Gatehouse Bank (120 Day)* | 1.78% | Close Brothers Savings (95 Day) | 1.72% | |
| Secure Trust Bank (120 Day) | 1.78% | Charter Savings Bank (95 Day) | 1.71% | |
| Source: Moneyfacts.co.uk | Source: Moneyfacts.co.uk | |||
Rachel Springall, a spokesperson from Moneyfacts, said: “While easy access accounts retain the crown for their popularity, notice accounts are a great choice as a go-to between fixed rate bonds, as they can allow savers to access their money either by giving notice or not, but savers need to be content with potential interest penalties.
“Notice accounts now pay 0.49% more in interest than easy access accounts – which pay 0.64% on average – and 0.36% more based on the top rate (1.46%) in its sector, so savers can earn more interest with a notice account.
“A notice account could then be a good choice for savers who want to aspire to a savings goal over the next few months, but do not want the instant temptation of an easy access account, or the inflexibility of a fixed rate bond, especially as these rates are on a downward spiral.”
