Notice saver accounts: watch your savings grow

There’s some thing (comparatively) new out there for term deposit investors. Several Australian banks are offering Notice Saver accounts.

Notice saver accounts are related to term deposits, but with a twist. How it operates is that you deposit your cash with a economic institution and get access to that funds not at call, or at the end of a fixed term, but by giving a certain period notice –which is normally at least 31 days. If you don’t give notice, the money stays invested earning the notice saver interest rate.

Whilst the quantity of accounts on provide in Australia is not at present huge, it is likely that this will alter in the medium future, thanks to APRA’s new Liquidity Coverage Ratio. This makes it a lot more appealing for economic institutions to hold deposits which are there for at least 30 days (and for that reason not at-get in touch with). There might be a push to encourage savers to ditch their at-contact account and head for a Notice Saver account instead.

So – what are some pros and cons of Notice Saver accounts?

Rewards of notice saver accounts:

• One particular of the wonderful issues about notice saver accounts is that you are not faced with obtaining to make investment decisions at the finish of a term – the funds will basically stay there till you give notice.


• You can add to your notice saver whenever you want. That means that alternatively of waiting till you have a decent sum of cash to invest in a term deposit, you best your notice saver investment up every time you have tiny sums of spare money. This can assist with money management.


• Because of the higher benefit to economic institutions in holding funds that is not at-call, institutions could offer you a larger price of interest in comparison to at-call accounts.


• Your money is out of attain as it would be with a term deposit and you cannot commit it.


• It’s a bridge amongst a completely locked term deposit and an on get in touch with account.

Disadvantages of notice saver accounts

• It is easy to turn into complacent and fail to verify that the interest rate is competitive.


• The interest rate can change. Notice saver interest prices can go up or down whenever the bank chooses, whereas term deposit rates are fixed. If there is a key shift in interest prices this will affect you pretty soon.


• You may finish up leaving your cash in for a quantity of years and it would have been much better to take a higher interest rate term deposit for a longer fixed period. This of course can influence you if you’re investing in term deposits.

We expect to see much more Notice Saver accounts on supply in Australia over time. So watch this space.

Notice saver accounts: watch your savings grow