What Is a Notice Period Account?
While at first glance it might have a bit of an odd-sounding name, a notice savings account or notice account, is simple.
With a notice savings account, you need to let the provider (that’s us) know ahead of time that you’d like to withdraw your money. This is called ‘giving notice’.
How does a notice account work?
The notice period on a notice account is usually between 30 days and 90 days, although some go up to 120 days, or even longer.
At Wombat, we have 30-day and 95-day notice accounts. Withdrawing your money is as easy as you’d expect from us, only with a notice account, you’ll need to tell us in advance that you’ll be making a withdrawal.
For example, if you know that you need to access the money in your 30-day notice savings account on December 1st, you’ll need to let us know 30 days earlier.
Simple enough, right? But why might someone choose a notice savings account over a regular savings account?
The advantages of a notice account
In return for leaving your money in the account, and having to give notice in order to access it, notice accounts often come with higher interest rates compared to easy access savings accounts.
This is a big incentive for savers who are confident they won’t be touching their money on a regular basis. Add to this the positive effect of Compounding Interest, and you can see significant gains in your money.
Another benefit of notice accounts is the notice period itself. Having to wait to withdraw your money can make you think twice about whether you actually need to, which can help to curb unnecessary spending.
So notice savings accounts can be good for developing better saving habits and discipline.
Consider your goals and circumstances
While notice accounts can be good at helping reduce unnecessary withdrawals, if you have an emergency, say your car breaks down, you won’t have immediate access to your money, and will have to wait for the entire length of the notice period.
Notice savings account vs Regular savings account
Which type of account you choose depends on your financial goals. If you’re someone who needs regular and instant access to their savings, then a notice account isn’t for you.
If, however, you want to save for the long-term and don’t mind not having instant access to your money (and you’d like that higher interest rate), then you should consider a notice savings account.
Found this helpful? Explore Wombat’s growing range of savings accounts.