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Could a notice account offer the best savings rates?

Find out how to grow your money

Rates are finally on the up for savers, with Charter Savings Bank becoming the latest provider to offer table-topping deals – this time in the oft-forgotten realm of notice accounts.

Notice accounts, which allow you to withdraw your money after a set notice period, can provide better rates than instant-access accounts, while still allowing you to withdraw your cash.

Which? has looked at the best rates on the market, so you can find the best option for your circumstances.


Best-rate notice accounts

A notice account requires you to give a set amount of notice that you plan to withdraw your money – for example, a 90-day notice account would require you to alert the bank three months in advance.

As you would expect, the best rates tend to be offered by accounts with longer notice periods, but this isn’t always the case.

The highest notice account rate is from Charter Savings Bank. Its 95 Day Issue 18 account offers 1.67% on balances over £1,000. Unusually, this rate beats the 120-day notice account that had previously been top of the table.

The provider currently tops several other notice periods, too.

At 1.36% AER, Charter Savings Bank 30 Day Notice account offers a 0.31% higher AER than the second-highest rate in this category. Its 60 Day Notice account is more competitive than the next-best 60 Day Notice account by just 0.01%.

The table below shows the notice savings accounts and Isas with the top rates.

With such little difference between rates, it’s always worth considering other factors – such as lower initial deposits, for instance – that may make an account more suitable for you.

The table also illustrates that Isa notice accounts tend to have lower rates than notice savings accounts, but that doesn’t mean they’re not worth considering.

Money is held in an Isa is tax-free, so if the interest you earn from savings is likely to exceed your personal savings allowance, it would be more beneficial to have a lower AER rate than having to pay tax on your savings income.

Should you get a notice savings account?

The type of account you go for should reflect your savings goals and circumstances.

If you have little in the way of savings, and your cash flow needs mean you may need to take money out regularly, then a notice account may not be the right choice for you.

While there are short seven-day notice options such as the Swansea BS First Adult Saver, this account offers 1.25% AER.

This can currently be beaten by instant-access accounts such as the Bank of Cyprus UK Online Easy Access Account, which has 1.32% AER and requires no notice at all. This account also beats the rates for all of the Isa notice accounts.

However, if you have savings that you won’t need to access any time soon and that you want to grow above the current rate of inflation (2.4%), then a fixed-term account could be the best bet.

The table below shows the fixed-term accounts offering the top rates.

All fixed-term accounts beat the rates offered by notice accounts.

The top rate is from Vanquis Bank 5 Year Fixed Rate Bond, paying 2.7% AER on balances over £1,000 – which is a great return if you can do without the money in the account for that length of time.

To find the right home for savings, you can use Which? Money Compare to research hundreds of savings accounts and Isas.

How do notice accounts work?

A sort of halfway house between an instant-access and fixed-term account, notice accounts allow you to make an unlimited number of withdrawals, but require a specified amount of notice before you can access your funds.

The most common notice periods are 30, 60 and 90 days, but this can vary. Generally, the longer the notice period, the higher rate of interest on offer.

Depending on the type of account you have, you can give notice in writing, in-branch, online or over the phone. Before signing up, you should double-check with your provider about how to make withdrawal requests to see if it will be convenient for you.

Some accounts may allow early withdrawals, but using this option will usually mean forfeiting some or all of the interest you’ve accrued.

Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.

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