The best notice savings accounts

Simon Ward
by Lovemoney Staff Simon Ward on 12 April 2013  |  Comments 1 comment

You used to be able to earn a better rate if you locked your money away rather than putting it in an instant-access savings account. But is that still the case?

The best notice savings accounts

If you want to put some money away but don’t think you’ll need to access it in too much of a hurry, a notice savings account has always been a good option.

As the name implies, these accounts require you to give some notice before you withdraw your money or you’ll lose the interest you’ve built up.

In return, they historically offered better rates than instant-access savings accounts, although the rates aren't usually as good as you’ll find with fixed-rate bonds, which lock your money away for longer.

Sadly, in line with other savings products, interest rates on notice accounts have fallen sharply over the course of the past couple of years, particularly for 60-day and 90-day accounts.

That's partly because banks and building societies are generally lending less so don't need the same level of deposits as they did in the past. They are also able to borrow money at cheaper rates, thanks to programmes such as the Government's Funding For Lending scheme.

Let's have a look at the top accounts across the different notice periods and see how they compare to other types of savings accounts.

Top 30-day notice accounts

Account

Interest rate AER

Minimum deposit

Access

Notes

Principality BS: Principality Promise Saver

2.00%

£500

Branch, post

Rate includes 0.80% bonus in first year

Post Office: Reward Saver

1.50%

£500

Branch, phone, post

Rate includes 0.75% bonus for first year

The best rate around is 2% - which you can also get in an instant-access account - and you'll need to watch out for the interest rate drop on these two when the bonus period ends. 

Top 60-day notice accounts

Account

Interest rate AER

Minimum deposit

Access

Aldermore 60-Day Notice Issue 3

2.10%

£1

Branch, post

Manchester BS: 60-Day Platinum Notice Issue 4

2.01%

£1,000

Branch, post

Kent Reliance BS: 60-Day Notice Issue 7

1.75%

£1,000

Branch, online, post

Skipton BS 45-Day Notice Account

1.75%

£100

Branch, post, telephone

There a number of other accounts that only cater to savers in the local area, such as the Fifty Fifty from Loughborough BS, which may be worth a look. However, it’s worth noting that locking your money up for an extra 30 days may actually bag you a worse rate than with a 30-day notice account. 

Top 90-day notice accounts

Account

Interest rate AER

Minimum deposit

Access

Notes

United Bank 90-Day Notice Gold account

2.26%

£1

Branch, post

 

Melton Mowbray BS: Self Unlimited Online Affinity

2.00%

£1,000

Online

The Melton supports Self Unlimited by making a donation annually after 31 December, of 0.25% of the average daily balances held in the Self Unlimited Affinity Savings account. 

Melton Mowbray BS: LOROS Online Affinity Savings

2.00%

£1,000

Online

The Melton supports LOROS by making a donation annually after 31 December, of 0.25% of the average daily balances held in the LOROS - Online Affinity Savings accounts. 

Norwich & Peterborough BS: Branch Notice Saver Issue 3 1.65% £1 Branch, phone, post

Again, these rates offer little improvement on notice accounts with shorter notice periods.

Top longer-term notice accounts

Account

Interest rate AER

Minimum deposit

Notice

Access

Shawbrook Bank 120-Day Notice Account Issue 8

2.10%

£1,000

120 days

Online, post

Investec High 5

2.10%

£25,000

Six months

Online, post

Investec High 10

2.05%

£25,000

Three months

Online, post

Marsden BS Direct Saver 120

1.85%

£5,000

120 days

Phone, post

Again, there’s not much benefit to locking your cash up for such a long term, with the top rate from Investec actually paying less than the leading 30-day notice account.

A word or two on interest rates

You'll notice some of these accounts come with bonus interest rates for the first year. If you decide to plump for one of these, it's worth keeping an eye on that rate, as when it disappears the account will drop to a much lower, almost certainly uncompetitive rate. Some interest rates are also variable, which means they could be cut or increased at any point.

Is an ISA a better option?

If you don't have a huge pool of money to save and you're likely to need access to it at some point, you could put it in an easy access or short-term notice Cash ISA.

While these are better used for long-term savings, if you're not going to have any spare cash to top up your savings you'll probably earn a better interest rate. And of course you won't pay any tax on the interest. For the latest rates, take a look at The UK's best Cash ISAs. Just remember that once you've used some or all of your yearly allowance it's gone for good.

The Financial Services Compensation Scheme

Finally, just a reminder that all the above accounts are covered by the Financial Services Compensation Scheme (FSCS).  This guarantees your savings up to £85,000 per financial licence (if you want to see who owns who, read Who owns your bank or building society?) in the event it goes under.

More on savings

Compare savings accounts

The best instant access savings accounts

The top fixed rate savings bonds

The UK's best Cash ISAs

Top Cash ISAs for transfers

Top savings accounts for kids

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Comments (1)

  • oldhenry
    Love rating 343
    oldhenry said

    But the Sanander 123 account pays better than those above, as long as you follow the rules, which make me think how utterly crap saving has become in this nation that is infatuated by a governmnet that wants you to spend and borrow.

    How sad is it?

    Report on 30 November 2012  |  Love thisLove  0 loves

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