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Savers deciding between the convenience of an easy-access account and better returns on offer from fixed-rate deals could pick an option in the middle.
Investec has launched a market leading 90-day notice savings account paying 2.1 per cent on balances of between £5,000 and £250,000.
Saver deposits are protected up to £85,000 per individual under the FSCS.
A notice account is a halfway house between an easy-access and fixed rate account. They enable savers to withdraw their funds following a notice period, typically ranging between 30 and 120 days, but can offer savers a better return than they might otherwise achieve with an easy-access account.
Stand out deal: The Investec 90-Day Notice Saver, which can be opened online, offers the highest rate of interest of any notice savings accounts currently available.
The Investec 90-Day Notice Saver, which can be opened online, offers the highest rate of interest of any notice savings accounts currently available and pays interest on a monthly basis.
It also offers unlimited deposits and withdrawals, albeit subject to a 90-day notice period.
Someone stashing £20,000 in Investec’s deal could expect to earn £424 in interest over the course of a year.
Is a notice account a good option?
The notice account offers savers an improvement on any rate they’ll get by keeping their cash in an easy-access account.
In terms of the best easy–access deals, Virgin Money is offering 1.71 per cent on balances up to £25,000 for its easy-access linked savings account, albeit savers will need to become Virgin current account holders to benefit.
Savers can do better by putting their money in a fixed rate account, which typically cannot be accessed without incurring a penalty.
For example, the best one-year fixed rate deals pay 2.75 per cent, whilst the best two-year deals pay 3.1 per cent.
However, with the base rate likely to head higher in the coming months, fixed-rates could follow suit – and notice accounts give the option of good interest, while also being able to move money if rates do improve over the course of 2022.
James Blower, founder of the Savings Guru said: ‘Notice accounts definitely have a place in the market – they work well for savers who want to earn a better return on their savings but who don’t want to be too far away from accessing them or know they’ll need to access them at some point so can’t tie up for a fixed period.
‘The best ones pay better rates than easy access accounts but not as good as fixed.
‘I would suggest to savers who are considering using them to keep a stash of cash available to cover any emergencies or possible needs for the notice period as very few will let you access without serving the full notice period.
‘The account from Investec is a good rate with a 0.5 per cent premium on the best easy-access rates but it is possible to get another 0.65 per cent for the best one year fixed rates so fixing will be more rewarding.
‘However, they are a good compromise giving a better return than easy access but with the flexibility of being more accessible than fixed.’
Investec offers international banking, investment and wealth management services in South Africa and the UK, as well as certain other countries.
For savers considering Investec deal, they may also want to consider the savings platform, Raisin, which is currently host to some of the top paying notice deals on the market.
It is also offering a £25 welcome bonus to This is Money readers, but they must open a new Raisin Account via this link* or any link originating from our website.
It offers savers the chance to boost their savings by £25 when they open and fund an account on its marketplace with a minimum of £10,000.
QIB UK is offering 1.95 per cent via the Raisin platform.* Someone depositing £10,000 in this account for the first time could effectively secure a 2.2 per cent return when factoring in the £25 bonus.
For someone looking for a shorter notice period. Investec is offering a 32 day notice account via Raisin paying 1.61 per cent.* Someone depositing £10,000 in this account for the first time could therefore boost their rate to 1.86 per cent – when including the £25 bonus.
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