What is a notice savings account and how does it work?

Full answer

A notice savings account sits between easy-access and fixed-term savings. You can pay money in freely, but to withdraw you must give the provider a set number of days' notice - commonly 30, 60, 90 or 120 days. Request your money today on a 90-day account and you receive it roughly 90 days later. If you need it sooner, most providers either refuse early access entirely or charge a penalty equal to the lost interest for the notice period. In return for tying up access, notice accounts typically pay a higher variable interest rate than instant-access accounts, while avoiding the full lock-in of a fixed-rate bond. The rate is usually variable, so the provider can change it - useful when rates are rising, a drawback when they fall. Notice accounts suit savers building an emergency buffer they are unlikely to touch suddenly, or those parking money between other commitments. The interest is taxable. For 2026/27, basic-rate taxpayers get a Personal Savings Allowance of GBP 1,000 of interest tax-free, higher-rate taxpayers GBP 500, and additional-rate taxpayers nil. Worked example: GBP 40,000 in a notice account paying 4.5% generates GBP 1,800 of interest in a year. A basic-rate taxpayer pays 20% on the GBP 800 above their GBP 1,000 allowance - GBP 160 of tax, usually collected via a change to your PAYE tax code. To shelter savings interest from tax entirely, consider a Cash ISA, which uses your GBP 20,000 annual ISA allowance. Use a savings calculator to compare the post-tax return of a notice account against an ISA or fixed bond before committing.

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