Lockdown savers pile into ‘fairly-easy access accounts’ With rates on notice deals rising, could this ‘halfway house’ now be a better option?

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  • Average notice account rate increased from 0.37% to 0.54% in six months
  • Average Easy Access deal pays 0.17% and average settles 0.79% for one year
  • Easy-access deals likely to be the first port of call for savers in times of volatility
  • Notice accounts can offer higher returns while allowing access to cash with a notice period of 30-120 days

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Hungry savers hunting for a return while maintaining immediate access to their cash may find they have little incentive to move their money right now.

Easy-access accounts typically pay a record low of 0.17 percent on average, with some high street banks paying as low as 0.01 percent.


But despite this, lockdown savers have accumulated in these accounts since the start of the pandemic.

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Savers may be willing to explore notice accounts if they are not comfortable locking their money into a fixed rate deal.

According to Paragon Bank, total savings on CACI’s database – which captures data from more than 30 providers – have risen 8 percent since March 2020 from £903 billion to £975 billion.

Much of this growth has been driven by easy-access accounts, which have grown by more than 16 percent during the pandemic.

In March 2020, CACI easy access accounts were worth £505billion and are now worth £589billion.

Derek Spalling, savings director at Paragon Bank, said: ‘We are seeing people save at a slower pace since the pandemic restrictions were lifted, which was to be expected.

‘However, savings stocks continue to rise steadily month-on-month.

‘This makes it clear that savings remain a priority for many and could be a sign that people are still feeling cautious and prioritizing construction contingencies and an emergency fund while the economy is still feeling precarious. has been.’

Online Accounts – Easy Access
Account Type (Minimum Investment)0% tax20% tax40% tax
Bonus Accounts – Pay bonuses for the first 12 months or more. Here are the rates with bonus
Synergy Bank Online Easy Access 41 (£1+) (5)0.60.480.36
Marcus by Goldman Sachs (£1+) (2)0.60.480.36
SAGA EASY ACCESS SAVINGS (£1+) (2)0.60.480.36
Leeds BS Limited Issue Online Access Account 22 (£1,000+)(7)0.550.440.33
tesco internet saver (£1+)(8)0.550.440.33
Accounts without bonus – these rates are not promoted by a temporary bonus that expires after one year
Family BS Premier Saver 4 (£10,000+) (10)0.650.520.39
aldermore double access (£1,000+) (9)0.60.480.36
charter savings bank (£5,000+)0.60.480.36
Investec Online Flexi Saver (£5,000+)0.580.460.35
Coventry BS Limited Access Saver (Online) 5 (£1+) (7)0.550.440.33
tandem quick access saver (£1+) (9)0.550.440.33

According to Paragon Bank, the average easy-access balance is now £11,603, an increase of over £1,300 since March 2020, when it stood at £10,246.

Paying just 0.17 percent for someone with £11,603 held in an average easy-access account, they can expect to earn less than £20 over the course of a year.

Fixed-rate deals offer better returns, with an average one-year fixed rate deal payout of 0.79 percent and the best available deal by Gatehouse Bank paying 1.51 percent.

But these deals also mean locking out savings for a year or more, which some people may not be willing to risk if they need to access the money.

A lesser-known product, the Notices account, can offer savers the perfect alternative to an easy-to-access or fixed-rate deal — it’s halfway home between the two.

And while easy-access rates remain at record lows, rates for notice accounts have risen — now typically three times ‘interest’ paid.

They enable savers to withdraw their funds after a notice period, usually between 30 and 120 days, but can offer savers better returns than an easy-to-access account.

Moneyfacts finance expert Rachel Springall said: ‘Consumers comparing different savings accounts can appreciate that most notice accounts will allow them to deposit money less often and often, unlike fixed bonds, which are usually deposited at the time of application. A lump sum advance amount is required.

‘There are many notice accounts that pay better variable rates than easy-access accounts, even if savers are happy to give notice to access their cash.’

Overall Top Information Account Rates
the providerRate of interestnotice period
identify the bank1.1%95 days
Secure Trust Bank 1.07%90 days
Oak North Bank 1.06%120 days
oxbury bank1.06%120 days
DF Capital 1.05%120 days
charter savings bank 1.05%120 days
Source: Moneyfacts.co.uk

According to Moneyfacts, the average notice account rate has hit its highest point during 2021, with the average deal now paying 0.54 percent, up from 0.37 percent six months ago.

The top payment notice account offered by Recogniz Bank currently pays 1.1 percent with a notice period of 95 days, which is 0.45 percent more than the easiest-to-access deal.

For someone with £10,000 in the best paying Easy Access account (0.65 percent), this means they can earn an additional £45 over the course of a year by switching to a Best Pay Notices account.

Should you consider a notice account?

Notice accounts are essentially a half-home for those who are fed up Rock bottom easy-access rates but beware of locking your money for a certain amount of time.

James Blower, Founder of Savings Guru, said: ‘Notice accounts are growing in popularity and more savings providers are offering them.

‘They appeal to savers who have enough money to survive for a few months but don’t want to wait too long for their money if their circumstances change.

‘So, they don’t want to close their remaining savings for a certain period, but are happy not being able to use it for three to four…


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