Notice accounts could be the answer for long-suffering savers
Notice accounts work in a similar way to other savings accounts: you deposit your cash with a bank or building society and earn interest.
The difference is how you get your hands on your money.
With easy access accounts, you can withdraw your savings immediately, while with fixed term products such as one- or two-year bonds, you have to wait until the maturity date before you can get your hands on your cash.
With notice accounts, you can make withdrawals as long as you give your provider advance warning. This could work in your favour if you’re saving for a holiday, a birthday present, or a new car.
Rates tend to be higher than you’d get with an easy access account, and typically the longer the notice period, the better the deal.
The good news for savers is that providers have improved the interest provided by notice accounts in recent years.
Data from rate monitoring firm Moneyfacts shows the average notice account rate has risen to 1.15 per cent, the highest seen since October 2012. A year ago, the average rate was just 0.84 per cent.
“Despite easy access accounts remaining a firm favourite among savers, it would be unwise for consumers to overlook the competition that has been occurring within the notice account market,” said Rachel Springall, a finance expert at Moneyfacts.
Where to get the best rates
Challenger banks offer many of the top rates, replicating a trend seen across the savings market as a whole.
Secure Trust Bank pays 1.91 per cent and only requires savers to give 90 days’ notice, a better rate and a shorter timeframe than a year ago when the best you could get was 1.67 per cent on a 95-day account.
If you want a shorter time frame, Secure Trust’s 60-day account pays 1.64 per cent, while Shawbrook Bank pays 1.51 per cent on its 45-day account, more than you’d get from the best easy access account, which pays 1.50 per cent.