All about notice savings accounts

These types of accounts will allow you to withdraw cash only after a certain amount of time. Rates on notice savings used to be very generous; however now they are much lower than they used to be.

Using a notice savings account

You may be able to benefit from a good rate of interest in a notice savings account if you know that you won’t need access to your cash immediately. You need to give the bank notice if you want to make a withdrawal and these notice periods can vary between thirty, sixty and ninety days, although some accounts do allow you to give as little as seven days’ notice.

Often, if you aren’t able to give enough notice, you can still access the money but the bank will charge you a penalty which is equal to the amount of interest that you would have been paid during the notice period.

Beware of penalty charges

If you do need to withdraw cash, some accounts offer the ability to do this, but will limit the amount of times you can withdraw cash to two or maybe three times per year, or even certain months of the year. Normally, you will need to maintain a certain amount in your account to benefit from this. Alternatively some accounts pay a bonus if no money is withdrawn during the year and then they allow you to take out the bonus from the account without losing your bonus for the next year.

Supposedly, by reliquishing the need to have instant access to your cash, you should be able to get a higher interest rate. Unfortunately this isn’t always reflected in the rates. Usually there are rules and restrictions accompanying these accounts that can be almost comical!

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