A term deposit & a savings account enter a bar…
A term deposit and a savings account go into a bar. Yada yada yada, the notice saver account is born.
Bad jokes aside, there is a new kind of saving product in town. You know about term deposits, where you agree to lock your money away for a fixed length of time, in return for regular interest payments. And you know about savings accounts, where, subject to bonus rate rules, you can add to and withdraw your money anytime.
Well now, you can have the best of both worlds. Half way between the flexibility of an at-call savings account and the good rates and discipline of a term deposit is a new kind of savings product – the notice saver account. There is also the notice term deposit. These brothers and sister deposit products are a little bit term deposit and a little bit savings account.
What is a notice saver account?
A notice saver account is an online variable rate savings account that allows you to make regular deposits just like a regular at-call savings account. There is no maturity date like a term deposit, the account is ongoing. When you want to get your money out your need to give notice. Common notice periods for a withdrawal from a notice saver account are 1 month, 2 months or three months. You can cancel your withdrawal request at any time. The account stays open as long as there is still money in it.
In return for agreeing to give notice of your intention to withdraw, the notice saver account gives you an attractive variable rate of interest. The interest rate gets more attractive as the notice period increases.
Which banks offer notice saver accounts?
New bank funding rules starting 2017 favour stable deposits over at-call deposits, so more banks and credit unions are expected to introduce notice saver accounts in the next few months.
The first to market with a notice saver product was online bank RaboDirect.
RaboDirect has three notice saver accounts. The 31-day Notice Saver account is offering a variable rate of 2.60 per cent. The Notice Saver 60 is offering a variable rate of 2.65 per cent and the RaboDirect Notice 90 is offering 2.75 per cent. Those great rates come without the strings attached to many other savings account bonus rates, like minimum deposit rules.
Investec also has a 31 day notice saver account and Westpac Institutional has a corporate notice saver account called Evergreen.
ANZ Bank has tweaked the notice saver concept and created the ANZ Advance Notice Term Deposit. This is just like an ordinary term deposit but you get a better rate for agreeing to give 31 days notice of your intention to withdraw funds early. Fees and charges also apply to early term deposits withdrawals.
The ANZ Advance Notice Term Deposit 50 has an even better rate for a slightly longer notice period.
You can research and compare savings accounts from all of Australia’s major banks and credit unions here.
You can research and compare term deposits from all of Australia’s major banks and credit unions here.