Do you want a better savings rate, but still have access to your money? Messaging accounts can be the perfect solution for savers
- Savers can get more than 2% by choosing a Cancellation account
- A cancellation account is a middle ground between an easily accessible and a fixed-income deal
- Investec and OakNorth currently offer the best buys
- Savers can also use the Raisin savings platform. consider
The products in this article have been independently selected by This is Money’s specialist journalists. If you open an account with links marked with an asterisk, This is Money earns an affiliate commission. This should not affect our editorial independence.
Savers looking to squeeze every last drop of interest out of their nest eggs should consider the little-known notification account.
You can now earn 2.1 percent on Investec’s deal, while OakNorth pays 2.12 percent.
A cancellation account is a middle ground between a low-threshold and a fixed interest deal. The catch is that you have to warn your bank if you want to withdraw money. Usually this is between 30 and 120 days.
Top rates: a cancellation account is a middle ground between an easily accessible and a fixed rate deal
However, if you can be organized, you can earn almost a fifth more than you would with the best 1.8 percent easy-to-access account at Al Rayan Bank.
Fixed income deals still pay a lot more. Rates are going up to 3 percent, with Charter Savings Bank’s highest one-year rate of 2.83 percent.
But these accounts are more restrictive, as you usually can’t get your hands on your money until the end of the term.
James Blower, founder of The Savings Guru, says, “Notice accounts work well for those who want better returns on their savings, but don’t want to be too far away from accessing these accounts.”
Savers currently have a massive £994 billion in easily accessible accounts. Cancellation accounts and fixed deals are not nearly as popular, with deposits of around £155 billion. But with many major banks still paying pitiful rates despite base rate hikes, it’s worth shopping around.
The more notice you are willing to give, the higher the rate should be. But right now, it’s not necessarily worth opting for a longer notice period, as the best 120-day bill only pays 2.15 percent, compared to 2.1 percent with Investec’s new 90-day deal.
The short-term accounts are much less generous. The rates are 1.45 percent to 1.5 percent with 30 days’ notice – no better than you can earn with an easily accessible account.
However, the best paying 90-day accounts from Investec and OakNorth are only available online. And there is a minimum deposit of £5,000 with Investec. If you prefer to manage your account through a branch or by post, construction associations do offer the accounts, but at lower rates.
One of the best is Kent Reliance at 1.4 percent, with 60 days notice.
As usual, smaller banks and mortgage banks are covered by the Financial Services Compensation Scheme (FSCS). It protects deposits worth up to £85,000 – £170,000 in joint accounts – in the event of a bank failure.
Savers may also want to consider the savings platform Raisin, which currently hosts some of the highest paying cancellation deals on the market.
It also offers a £25 welcome bonus to This is Money readers, but they need to open a new Raisin account through this link* or a link that comes from our website.
It offers savers the chance to increase their savings by £25 when they open and fund an account on its marketplace with a minimum of £10,000.
QIB UK offers 1.95 percent through the Raisin platform.* Someone who deposits £10,000 into this account for the first time can effectively earn a return of 2.2 percent if the £25 bonus is taken into account.
For someone looking for a shorter notice period. Investec offers an account with a notice period of 32 days through Raisin and pays 1.61 percent.* Someone depositing £10,000 into this account for the first time can therefore increase their rate to 1.86 percent – when the £25 bonus is included.
Before choosing a cancellation account, make sure you have an easily accessible emergency fund.
How to find the best savings rate
Savings rates have been in the doldrums for many years, but the situation was greatly exacerbated by the pandemic and the emergency rate was cut to 0.1 percent.
But there are ways to make sure your money is at least in the best of the bunch at all times.
Checking top rates is essential, but it’s also possible to make life easier in general and manage your piggy banks in one place.
A number of savings platforms have been launched in recent years, offering savers the ability to switch as better deals become available and manage accounts from various banks and mortgage lenders.
They each work slightly differently and contain their own exclusives. Take a look at the offer for yourself:
The platforms below have been independently selected by the specialized journalists of This is Money. If you open an account with links marked with an asterisk, This is Money earns an affiliate commission. This should not affect our editorial independence.
Or you can check out This is Money’s comprehensive best-buy savings charts, independently compiled by savings guru Sylvia Morris:
> Compare the best savings rates now