Download Moneybox to save and invest for your future
- Download the app and get started with £1
- Save and invest starting with your spare change
- Market-leading cash Lifetime ISA at 1.4%
- Sign up takes minutes
Notice savings accounts
Let your bank know in advance if you need to withdraw your money, to earn interest at a better rate.
Last updated:
All savers face the same dilemma: when am I going to need the money I’m putting aside? Should I lock it away in a fixed rate bond or keep it at hand in an easy-access savings account?
Not everyone knows that there’s a middle ground between the two. If you can’t make up your mind, notice savings accounts make for a nice compromise.
What are notice savings accounts?
Notice savings accounts are savings accounts from which you can withdraw your money whenever you need it, as long as you give adequate notice to your bank. The notice required will depend on your account’s terms and conditions.
As access to the account is possible but only under certain conditions, the interest rates offered by notice accounts normally stand somewhere between those for easy access accounts and fixed rate bonds.
How do notice savings accounts work?
Notice savings accounts are not so different from easy access savings accounts, but you must make sure you know the terms and conditions inside out before applying, because the notice period makes things a tad more complicated:
- Application. Usually a pretty straightforward process, you can apply online or in person by providing your personal details and a proof of ID.
- Deposits. You can make deposits into the account whenever you like. Be aware that some accounts can only be opened with an initial deposit of £1,000 or more.
- Interest. It can be paid monthly or annually, into the account itself or into a current account.
- Withdrawals. You can only withdraw your funds or close the account after the agreed notice period has passed. Some accounts may also restrict how many times a year you can do it.
- Notice period. This can vary hugely, but for most notice savings accounts, it’s between 30 and 90 days. The longer the notice required, the higher the interest rate is likely to be.
Should I get one?
Notice savings accounts are weird little creatures. They aren’t hugely popular because if you need your savings to deal with an emergency, 30 days tend to be too long a wait anyway. People often prefer keeping emergency funds in an easy access savings account or in a current account and extra savings in a fixed rate bond, where they can earn more interest.
However, notice savings accounts can become handy if you already have a home for your emergency funds, but are unsure of your medium-to-long-term plans. For example, if you think you may need to pay the deposit for a house or buy a new car in the next 12 months. These kinds of decisions take time anyway (but not a full year!), so notice accounts are a good option.
Finally, they are also a good idea if you think you may want to make extra deposits into your account: fixed rate bonds don’t allow it after the first week or so from account opening.
How to compare notice savings accounts
There aren’t loads of notice savings accounts available on the market, but here’s a basic list of features to check out when comparing options:
- Interest rate. It will come as no surprise to you that the higher it is, the better for your finances.
- Notice period. A shorter one means easier access to your savings but may also come with a lower interest rate.
- Minimum initial deposit. Some accounts can be opened with as little as £1, but that’s not always the case.
- Where and when interest is paid. It may not make a massive difference, but you still want to check if it’s monthly or yearly and whether you can choose between having it sent to the savings account itself or to another account. If it’s paid into the account itself, you’ll also earn interest on your interest.
Are notice savings accounts safe?
Most notice savings accounts are covered by the Financial Services Compensation Scheme, which protects your savings up to £85,000 per account. Make sure you double-check that that’s the case with the account you’re considering.
Frequently asked questions
Read more on this topic
-
Revolut launches "market-leading" savings account - but what's the catch? UK challenger bank Revolut has entered the UK savings market with its Savings Vault account.
-
Compound interest for savings accounts We look at the definition of compound interest, what it concretely means and how you can use it to grow your savings more quickly.
-
Saving money in London Even though London is an expensive city, there are several easy ways to save money on food, travel, shopping and entertainment.
-
Offshore savings accounts Learn how offshore savings accounts work, which taxes you need to pay and how to score the best deal.
-
Compare the best fixed rate bonds Get the best interest rates with fixed rate savings accounts and learn how to calculate if they're worth the hassle of having your money locked away.
-
Compare the best easy access savings accounts Earn interest on your savings while still being able to withdraw them if you need them with an easy access savings account.
-
Cash ISA subscriptions fall as savers turn to stocks and shares ISAs Almost 700,000 savers less had a cash ISA in the 2017-18 financial year than in the year before, official figures from HMRC reveal.
-
Help to Buy ISA: How does it work? Want to find out more about Help to Buy ISAs? This guide sums up how they work and who is eligible.
-
Lifetime ISAs: What are they? LISAs can get you up to £1,000 a year for free – with certain conditions. Our guide looks at how they work, their pros and cons and whether they're worth it.
-
Metro Bank review January 2020 Metro Bank branches have almost supermarket-like opening times. Our review looks at whether its banking products keep up with its customer service.