With the recent base rate cut to 4% earlier this month, most savings products have fallen by at least 0.25% in line with the Bank of England’s decision.

While some savers might see this as a sign to lock in to fixed-rate products – such as three-, six-, or twelve-month terms – others might not be as comfortable with the idea of not being able to access their funds for several months.

Notice accounts may offer a happy medium.

Instead of months, notice accounts are measured in days. Common lengths are 30 days, 45 days, 90 days, and 120 days, although sometimes banks offer slightly altered lengths, like 31 days.

These days are how long the funds would take to be returned to you once you have given notice to the bank.

For example, a 30 day notice account means that your funds would be returned to you thirty days after you have given notice. During these thirty days, your deposit will still be earning interest, just as it is before you give notice.

Unlike fixed-rate products, notice accounts have variable interest rates, which means the interest rate could change even after you have given notice. However, notice accounts often have slightly higher interest rates than instant access products offered by the same bank.

This is because the bank can be sure that your money will be with them for at least the set number of days specified in the notice product. The longer the notice period, the higher the interest rate offered to customers.

You can give notice whenever suits you, whether that’s immediately after opening the deposit, or waiting a few weeks, or months, until you need the money in the set amount of days’ time.

There can be penalty charges for early exits of notices, so be sure you are in a position to not require access to the funds for the set amount of time of your notice account as soon as you decide you need to access the funds once the notice period has ended.

You can explore our notice accounts by signing up today here.

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