Notice accounts supposedly pay higher rates of interest, but you have to give your lender notice (usually 30,60 or 90 days)before making any withdrawals. The interest rate paid is dependant on the sum invested and the notice period. Usually the larger the sum and the longer the notice, the higher the interest rate.
These accounts often require a higher opening balance, although a number do start at £1. The downside to these accounts is that early withdrawal before the end of the notice period will mean penalties.
Typically customers lose all the interest they would have accrued during that time (the notice period required) on all the funds in the account, not just the sum withdrawn. This can be considered as a good way of encouraging long term saving.
If, therefore, you think you may need to access your funds in a hurry make sure you put some money aside in a penalty-free easy access account.
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