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Notice savings account rates on the rise – should you open one?

We reveal where to find the best rates for your savings

Banks are finally starting to increase their savings rates, and now could be the perfect time to take advantage of a notice account.

Following the Bank of England’s decision to increase the base rate to 0.75% in August – and with the potential for further increases in the coming months – banks are finally starting to pass that increase on to savers.

According to research by Moneyfacts, notice account rates are currently the highest they’ve been since 2012, averaging 1%. This is 0.4% higher than the average rate offered by instant-access accounts.

While the best interest rates are usually still offered by fixed-rate accounts, locking your cash away for several years now might mean you miss out on higher rates if they continue to rise in the coming months and years.

This means that putting your cash in an account which allows you to withdraw it after a certain notice period could allow you to jump onto even better deals as they crop up.

Below, we reveal the best-rate notice accounts currently available.


Where can I find the best notice savings account rates?

A notice account gives you an unlimited number of withdrawals, but you do need to give your bank a certain amount of notice beforehand.

Notice periods tend to range from 30-180 days. So, if you can gauge in advance when you might need the money, you can often access higher rates than those on offer from instant-access accounts.

The table below shows the top-rate accounts for each notice term.

Account AER Minimum initial deposit
Charter Savings Bank 30-Day Notice 1.36% £1,000
Kent Reliance 60-Day Notice Account 1.5% £1,000
OakNorth 90-Day Notice Deposit Account 1.77% £1,000
PCF bank Limited 180-Day Notice Deposit 1.85% £1,000

Source: Which? Money Compare. Correct 1 October 2018. Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms & conditions of the savings account provider before committing to any financial products.

The general rule is that the longer the notice period, the higher the interest rate.

While none of these accounts beat the current rate of inflation (2.7%), they do at least offer some return on your money while it’s saved.

However, one sticking point that those with smaller savings pots may find is that all of these top-rate accounts require at least £1,000 as a minimum deposit.

The Which? Money Compare comparison tables let you search hundreds of savings and Isa accounts to find the best account for you.

Should I get a notice savings account?

While notice accounts offer higher rates to compensate for the inconvenience of having to wait out your notice period before receiving your money, there are a number of other options that could suit your savings.

We’ve looked at several alternatives, which either offer higher rates or easier access to your cash.

Instant-access savings accounts

An instant-access savings account allows you to make withdrawals without needing to give any notice, or having to wait until a certain fixed term is over.

The table below shows the instant-access accounts offering the top rates.

Account AER Restrictions
Marcus by Goldman Sachs Easy-Access Savings Account 1.5% £1 minimum initial deposit.
Yorkshire Building Society Single Access Saver 1.41% £100 minimum initial deposit. Only one withdrawal per year is permitted.
Kent Reliance Easy Access Account 1.37% £1,000 minimum initial deposit to receive 1.37% AER – balances less than this will receive 0.1% AER.
AA Easy Saver 1.36% £100 minimum initial deposit. 1.36% AER is only fixed for the first 12 months, after this it reduces to 0.2%.
Bank of Cyprus UK Online Easy Access Account 1.36% £1 minimum initial deposit. The 1.36% AER is only fixed for the first 12 months, after this it reduces to 1%.

Source: Which? Money Compare. Correct 1 October 2018. Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms & conditions of the savings account provider before committing to any financial products.

As the table shows, notice accounts can often beat the interest rates offered by instant-access accounts.

The outlier here is the recently launched Marcus by Goldman Sachs account, which we wrote about when it launched last week. This account offers 1.5% AER – a rate that can only be matched by notice accounts requiring you to wait at least 60 days to access your cash – with the added convenience of having a minimum deposit of just £1. The rate reduces to 1.35% after 12 months, but that’s still only 0.01% less than the top 30-day notice account.

There are also some tricky terms to look out for with instant-access accounts. For instance, while they do offer some degree of instant access, the accounts offering the top two rates both have restrictions on how often you can make withdrawals.

The Yorkshire Building Society account only allows one withdrawal per year (the year runs from when you open the account). So, while it offers the top interest rate, if you think you’re going to want to dip into your savings more often, this isn’t the account for you.

The Kent Reliance account, meanwhile, only offers a higher rate to those who make an initial deposit of £1,000 or more – otherwise you’re left with a paltry 0.1%.

And the AA and Bank of Cyprus UK accounts only offer the top AER rates for 12 months, after which they’re reduced. When that happens, you’d be better off switching to a higher-paying account elsewhere. So, if you know you won’t be bothered to shop around and switch in a year’s time, other accounts might be better suited to you.

One-year fixed-term bonds

Locking up your savings for just a year could mean your money is earning over a relatively short term, and then you can reassess the market in a year’s time.

The table below shows the top-rate one-year fixed-rate bonds.

Account AER Minimum initial deposit
My Community Bank 12 Months Fixed Term Deposits 2.1% £1,000
ICICI Bank UK 1 Year HiSAVE Fixed Rate Account 2.02% £1,000
Charter Savings Bank 1 Year Fixed Rate Bond 2.01% £1,000
OakNorth 12 Month Fixed Term Deposit 2.01% £1,000
Al Rayan Bank 12 Month Fixed Term Deposit 2% (EPR*) £1,000

*Expected Profit Rate. Source: Which? Money Compare. Correct 1 October 2018. Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms & conditions of the savings account provider before committing to any financial products.

As the table shows, sacrificing access to your money for one year can give a significantly higher AER.

My Community Bank offers 0.69% more than Yorkshire Building Society’s Single Access Saver, and the difference is just one transaction – if you can forgo that, your money could grow much more.

However, to gain access to these rates you need to have much more in the way of savings than you do for an instant-access account – all of these one-year fixed-rate bonds require at least £1,000 to even be able to open the account.

Notice cash Isas

Notice cash Isas work in a very similar way to instant-access savings accounts. The main thing that sets them apart is that money saved in an Isa remains tax-free, but the amount you’re allowed to deposit is also restricted by the annual Isa allowance (£20,000 for 2018-19).

The table below shows the top-rate accounts for notice cash Isas.

Account AER Minimum initial deposit
Hinckley & Rugby Building Society 7 Day Notice Cash Isa 1% £500
Aldermore 30 Day Notice Cash Isa 1.3% £1,000
Kent Reliance 60 Day Notice Cash Isa 1.3% £1,000
Earl Shilton Building Society 90 Days Notice Cash Isa 1.3% £10
Charter Savings Bank 95 Day Notice Cash Isa 1.4% £1,000

*Expected Profit Rate. Source: Which? Money Compare. Correct 1 October 2018. Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms & conditions of the savings account provider before committing to any financial products.

As the table shows, rates for notice cash Isas are all lower than notice savings accounts, and none can beat the instant-access Marcus savings account.

Perhaps if the rate was higher, Hinckley & Rugby Building Society’s 7-Day Notice Cash Isa would be a handy option for those who wanted to avoid some of the tricky terms offered by instant-access current accounts, but some may feel a reward of 1% isn’t enough for the inconvenience.

As top-rate accounts for 30, 60 and 90 days all offer the same interest rate of 1.3%, there seems little point in opting for a longer notice period, unless you opt for 95 days to earn an extra 0.1%.

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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