An Introduction To Notice Savings Accounts

If you do not need your money immediately, a notice savings account could be an option for you. Many people consider depositing their spare cash into a notice savings account because it often yields a higher rate of interest, so it is important to understand how it works.

What Is a Notice Savings Account?

Notice-based savings accounts are different from normal accounts because they only give you access to your money after a specified time period. This means that if you do not need your money straight away, you could get a better rate of interest (the percentage increase in value of your money over time) with a notice savings account. These accounts will only let you withdraw your money after the ‘notice period’ has ended. These notice periods are normally around thirty days, sixty days or ninety days (however, a few can be as short as a week). It is thinking carefully about how long you want your notice period to be, because if you withdraw early you will face a penalty charge.

Why Should I Consider a Notice Savings Account?

There are multiple benefits to this form of account. The main benefit of a notice savings account is the interest rate that the provider will offer. The account will pay slightly higher rates than other savings accounts in order to compensate for the inconvenience of having to give notice to withdraw money. This means that the longer the notice period, the higher the interest rate (this is not always true, but works in most cases).

There are other advantages to notice savings accounts. You may be eligible for an annual bonus if you have not made any withdrawals in a year. Both of these benefits are good, but they only work if you plan what money you are going to need in the future to make sure you do not need to withdraw early.

How Do I Find the Right Account For Me?

As with all financial accounts, picking one takes time and consideration. Firstly, make sure there are no opening restrictions on the account (some will only allow existing customers to open one). Some providers will also require a minimum balance to deposit. There may also be hidden charges, such as a loss of interest if you withdraw over a certain threshold. Make sure you ask about any conditional bonuses, the provider will know that this is one of the main benefits of a notice savings account. Of course, do not forget to shop around for the best interest rate. If you are ever unsure about opening an account, make sure you contact a money expert.