Post Office launches leading notice account
The Post Office has launched a new issue of its reward saver account.
With a rate of 3% and a notice period of only 30 days, it's one of the most competitive notice accounts on the market.
The reward account includes a 1.25% bonus interest rate for the first year. It also comes with the Post Office's 'savings promise', which ensures the account will amend its interest rate in line with any Bank of England base rate changes until January 2013 at least. So if the base rate rises by 0.5%, the interest rate on the account will rise to 3.5%.
Savers who wish to access their accounts will have to give 30 days' notice to avoid losing any interest. The account can be monitored through branches, by phone or post.
Dedication to savers
"The new issue of the Post Office reward saver account further demonstrates our dedication to branch savers.
"The best-buy rate will help more people make their money work harder for them," says director of savings and investments, for the Post Office, Richard Norman.
There are notice accounts paying higher interest rates, such as Shawbrook Bank's account paying 3.45% – but savers need to give 120 days' notice before they can access their money.
A savings account on which the account holder is required to give a period of notice before making a withdrawal or face a penalty, usually a loss of a specific number of days’ interest or pay a fee. Notice periods of 30, 60 or 90 days are common. These accounts usually pay higher than average interest rates and require large initial deposits (£1,000 minimum) so the notice period and penalties are there to discourage withdrawals. Some of these accounts will only allow a certain number of withdrawals a year.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.
Also referred to as the bank rate or the minimum lending rate, the Bank of England base rate is the lowest rate the Bank uses to discount bills of exchange. This affects consumers as it is used by mainstream lenders and banks as the basis for calculating interest rates on mortgages, loans and savings.