Notice Accounts

A Notice savings account is so-called because these accounts do not offer you immediate access to your savings. This means you are not able to take money out of the account without giving your banking institution notice. The amount of notice you must give depends on the institution but typical notice periods for these types of account range from fifty to ninety days. If you do not give the required notice, you will have to pay a charge or a penalty for an 'unauthorised' withdrawal. This could be in the form of loss of interest for a certain period, perhaps equal to that of the required notice period.

Many notice accounts use special interest rates to entice new customers (see Interest Rates). These offers are usually only valid for a certain amount of time and when the offer period ends the interest rates may be reduced to well below the market average. These types of savings account used to be popular because they offered customers unusually high interest rates. Today however, there is so much competition between savings account providers that there is no need to open a notice account purely to receive a more favourable interest rate; lots of providers offer high interest rates for instant access savings accounts. However, for the purposes of managing finances it might prove useful for some people to save money which can only be accessed after a certain period of time.