Last updated: Thursday, 25 July 2024

Previously, we’ve explained instant access accounts and explored everything you need to know about fixed-term accounts. In this post, we put notice accounts under the spotlight and explore why they can be the perfect middle ground for savers.

What is a notice savings account?

A notice savings account typically offers higher interest rates than instant access accounts but requires you to give your provider 'notice' before you can access some or all of your cash. For example, a 35-day notice savings account means you'll need to tell your bank or building society you want to withdraw your money 35 days before you need it. This differs from a fixed-term account, which locks away your funds without access until the term expires.

What are the pros and cons of a notice savings account?

The interest rate is usually higher than an instant access account, though lower than a longer fixed-term account. Simply put, the longer you're prepared to leave your money untouched, the better the rate of return.

Like instant access accounts, interest rates are variable, so can go up or down, affecting your interest income. Most banks continue to pay interest even during the notice period, but it’s worth checking the terms and conditions to make sure.

There are a wide range of notice accounts available to match your savings goals. Most notice periods range between 30 and 120 days. As long as you give your bank the required notice, you can withdraw your money at any time without paying any fees. However, if you do need to access your funds before the notice period is up, there may be a penalty to pay.

You can usually make more than one withdrawal with the required notice for each. You may also be restricted to a set number of withdrawals in a certain period. However, unlike fixed-term accounts, you can pay money into your account whenever you choose.

To open some notice accounts, there may be a minimum deposit.

How do notice savings accounts work?

Notice savings accounts work in a similar way to instant access accounts. However, if you want to withdraw money, you’ll need to give your provider ’notice’ in advance to avoid fees and charges.

Here’s how notice savings accounts work:

• Choose an account: Decide which type of notice account suits your savings needs and goals. Consider the interest rate offered, what notice period you’ll need (usually anything from 30 days), and whether there’s an initial minimum deposit you’ll need to make.
  
  
• Deposit your savings: Once your account is open, you can deposit your savings and start earning interest.
  
  
• Withdrawals: If you’d like to withdraw funds, contact your provider and let them know.
  
  
• Receive the money: Once the notice period has ended, you’ll receive your money in a nominated account.
  
  
• Early withdrawals: If you need to withdraw your cash before the notice period, this might be possible. But it’s likely you’ll be charged a penalty fee, such as losing some of the interest you’ve earned on your account.

Using notice accounts for smarter saving

Notice accounts can be the perfect middle ground when saving for a particular event or goal, such as a wedding or deposit on a home. It still gives you relatively quick access when you need your money, but also prevents any short-term temptation to dip into the pot.

When used together with instant access and fixed-term accounts, they offer a complete portfolio of savings options. Cash when you need it, an account that gives you better returns over the short-term and an option that allows you to maximise your interest income for (re)investment or long-term goals.

Explore: the ultimate guide to growing and safeguarding your savings.

What are some common types of notice savings accounts?

What type of notice account you choose to open will depend on your financial goals. Here are some common types of notice savings accounts:

• Long-term notice accounts: These are accounts that have longer notice periods – usually at least 90 days. By locking your money away for longer, you’ll usually be rewarded with higher interest rates, giving you better returns on your savings.
  
  
• Short-term notice accounts: These are accounts with shorter notice periods – usually up to 30 days. You’re still likely to get better rates compared to instant access account.
  
  

• Flexible notice accounts: These offer more flexible notice periods, such as 45 or 75 days. This gives you more freedom to align your notice period with your savings goals.
  
  

Flagstone vs. the High Street

Flagstone, the UK’s leading cash deposit platform, gives you access to multiple banks and savings accounts – including market-leading and exclusive rates – from a single application.

To see how we can help you grow your savings and maximise your interest, take a look at our range of notice, instant access, and fixed-term accounts available via our cash deposit platform.

Open a Flagstone account today

Frequently asked questions

Do I still earn interest during the notice period?

You should continue to earn interest during the notice period of your notice savings account. If you’re unsure of whether your account offers this, be sure to check the specific terms of the account with your provider.

Are there risks associated with notice accounts?

There’s minimal risk associated with depositing cash into a notice account. The main risk is if the bank or building society you’re opening an account with fails. It’s important to check that your funds are protected by the Financial Services Compensation Scheme, which protects your money up to a limit of £85,000 per person, per institution should your provider fail.

Can I deposit additional funds into a notice account after opening it?

Unlike fixed-rate accounts, a notice account lets you top up your savings whenever you like.

How much can I withdraw from a notice account?

You can only withdraw the specific amount you gave notice for. If you withdraw anything that exceeds that amount, you risk getting a penalty charge.

Learn: Glossary of common savings terms.

This article is not advice. If you would like to receive advice on your savings and investments, consider speaking to a Financial Adviser.