If you're looking to save for the future, it can be difficult to know what is the best savings account for you. Locking away money is important, but you don't want it locked away for a long time. Time to find out about Notice Accounts.
First things first, let's clear up why notice savings accounts are so called. It's because when you have one, you'll need to give your account provider (whether that's a bank or building society) some notice of when you'd like to access your money. And that leads us into reason number one.
Reason one - your money is not locked away
With a fixed term bond or fixed term ISA, you're committing your money to a plan that can be anywhere from one to seven years. If your life circumstances change between opening the account and the end of the term, your money is essentially out of reach (although you would be able to access your ISA funds after paying a penalty).
However, that's not the case with a notice account. With a period that's usually anywhere between 30 days and up to six months, you'll need to inform your provider and then after the period has elapsed, you'll be able to withdraw your money. It's because notice accounts work this way that we have reason two.
Reason two - generally better interest rate than instant access
It's important to do your research, but it's often the case that the interest rate you'll get on a Notice Account will be superior to that offered on instant access accounts. You can see it as a 'thank you' from the bank or building society for leaving your money with them, and not removing it at a seconds notice. That links to reason three.
Reason three - notice accounts can curb spending
Not being able to access your savings on a whim will mean that large purchases are out of the question.
However, it's due to this notice period and access that isn't instantaneous that you may not want to put all of your savings into a notice account. There could be unexpected car bills or house repairs, so you'll likely want to keep something aside just in case. Many notice account providers charge a hefty penalty if you need to make a withdrawal without giving the required notice period, whilst others won't allow any withdrawals without the necessary notice. It pays to do your homework because some notice accounts limit the number of yearly withdrawals, whereas others will only allow you to withdraw the full balance.
Reason four - open and control your account online
Opening a bank account now can be really easy to do online. There'll be an application form with questions about you and your savings, but when your account is up and running, you'll usually be able to see your balance online and watch it grow as you make deposits because many notice accounts allow you to pay in as many times as you like. Some providers may impose a minimum deposit amount, so always check to make sure you're comfortable with the terms and conditions.
Reason five - plan for the future
We've talked about not locking away your money, but another reason to consider a Notice Account would be if you have long-term savings goals for which you can plan ahead. This could be a wedding, a big birthday or a milestone anniversary that you're saving for and you'd like to have the money available to make the event extra special. With a notice account, you can keep adding to it (although there may be a minimum deposit limit in place) to help you reach that savings goal.
If you'd like to find out more about notice accounts, you can take a look at our Notice Accounts page.