Notice saver accounts: watch your savings develop

There’s anything (relatively) new out there for term deposit investors. Numerous Australian banks are supplying Notice Saver accounts.

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

Although the number of accounts on offer in Australia is not at present large, it is likely that this will modify in the medium future, thanks to APRA’s new Liquidity Coverage Ratio. This tends to make it more appealing for economic institutions to hold deposits which are there for at least 30 days (and for that reason not at-call). There may possibly be a push to encourage savers to ditch their at-contact account and head for a Notice Saver account alternatively.

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

Advantages of notice saver accounts:

• One particular of the great issues about notice saver accounts is that you are not faced with getting to make investment decisions at the end of a term – the income will basically stay there till you supply notice.


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


• Since of the greater benefit to economic institutions in holding income that is not at-get in touch with, institutions could supply a greater rate of interest in comparison to at-get in touch with accounts.


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


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

Disadvantages of notice saver accounts

• It is effortless to become complacent and fail to check that the interest price is competitive.


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


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

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

Notice saver accounts: watch your savings develop