Could There Still Be Life in the Old Notice Account Yet?

In the not too distant past, so-called 'notice accounts' emerged as a viable way to get better rates of interest on your money by ensuring that you forewarned the bank should you wish to make a withdrawal. Notice periods could vary from just a week to up to 90 days, but, of course, this lack of access to the owner's money meant a better rate of interest and acted as an incentive to keep money in the account for longer.

Yet today, easy access accounts are offering better rates of interest, and those looking for the best savings accounts available are not turning to long term accounts to look after their money. This is a result of some fierce competition amongst banks and lenders in the wake of the credit crunch. Historically low interest rates mixed with customers having less and less money to put away is causing those that are considering opening a new account to opt for easy access.

Financial specialist, Michelle Slade commented at moneyfacts.co.uk: "Providers are increasingly turning to their savings books to fund their lending activity. Those unable to compete in the ever competitive fixed rate bond market have moved to offering top rates on easy access. There is now no incentive for savers to invest their money in a notice account when they can get better rates and access to their money as soon as they need it."

However, despite the average rate of interest on current UK instant access accounts currently hovering around the 3 percent mark, there are new developments in the industry for those who are still eager to consider a notice account.

At the beginning of August, Nationwide Building Society launched their Champion Saver Account - of which Jessica Bown of Moneysupermarket, perhaps with a hint of sensationalism, asked: 'Is this the best savings account ever?' With a rate of 2.8 percent and a 60 day wait before access to your cash it doesn't seem particularly exciting - but the account did offer something else quite unique. The Champion Saver will track the average interest rate of the top five instant access accounts in the UK - with the promise of good long term value. Could there still be life in the old notice account yet?

Paul Roberts writes about UK finance and discusses savings accounts and the best savings rates.