Notice accounts that get you top rates and access to your cash

Savers often face a stark choice between locking up their money for a year or two to get a high interest rate, or leaving it in an account where it’s readily accessible but earns a lower interest rate.

However, there is a type of account that can provide a good compromise between the two.

Notice accounts allow you to withdraw your funds as needed, as long as you notify your bank in advance.

Usually you have to give a notice period of 30 to 120 days.

In exchange for the commitment to notify your bank of withdrawals, you are usually rewarded with a higher rate than offered in easy-to-access accounts.

Cancellation accounts currently offer interest rates averaging 3.28 percent, compared to 2.27 percent on easy access accounts, according to data from rate monitor Moneyfactscompare.

But the best deals are considerably more generous. QIB UK’s market leading 95 day notice account pays 4.75 percent. A saver with £10,000 in this account would earn £475 in interest in one year.

By comparison, a saver with £10,000 in the best easy access account, paying 3.9 per cent, would earn £390.

The QIB UK deal is available through the savings platform Raisin UK, which acts as a marketplace, allowing savers to manage multiple accounts in a single app and online account.

The account must be opened online with a minimum of £1,000. Depositors’ deposits are protected up to £85,000 per person under the Financial Services Compensation Scheme.

Fees on cancellation accounts are often variable, meaning the provider can raise or lower them without notice. Therefore, they are usually a better option if you think interest rates will continue to rise.

Please think twice before signing up for a notification account. If you need access to your money, for example if your car or boiler breaks down, you don’t want to wait 90 days.

As a compromise, you could split your rainy day money between an easy access and a cancellation account.

The money in an easily accessible account will act as an emergency fund, ready for unforeseen events; the money in the cancellation account can be used for more foreseeable events, such as a wedding or a holiday.

Anna Bowes, co-founder of savings website Savings Champion, says: ‘Cancellation accounts are often overlooked, possibly because there are currently no High Street banks.

‘For some people it is important that they do not have access to their money immediately to avoid diving into their savings, so checking accounts can be a valuable part of a balanced savings portfolio.

If you make sure you have funds in easy-to-access accounts for rainy days and money in fixed-rate bonds for the longer term, cancellation accounts can be a good way to charge as much interest as possible on the funds you don’t need immediately. , but don’t want to be stuck for a long time.’

James Blower, founder of savings website The Savings Guru, agrees. He says: ‘Cancellation accounts are ideal for savers who don’t need their money in the short term, but also don’t want to be locked up for a certain period of time.

Ideally, I would always recommend keeping up to three months’ worth of expenses in an easily accessible savings account. Aside from that, notification accounts are a great shout.”

Another option to consider is a short-term, fixed-rate account that locks in your savings for just three or nine months.

In contrast to most cancellation accounts, once you have opened a savings account with a fixed interest rate, you can often no longer make any deposits.

And as with all fixed rate accounts, you’ll need to look for a new deal at the end of the term. But they offer generous rates and more flexibility than one-, two-, or five-year flat rate deals.

For example, Atom Bank offers a contract with a fixed interest rate of six months and pays 4.8 pc. A deposit of £10,000 into this account would net £240 by Christmas.

ed.magnus@thisismoney.co.uk