With a notice saver account you have some control over when you can access the funds.
60 day notice savers are a fairly new way for Aussies to tuck away their savings. When you choose this product, you are getting the benefit of a competitive interest rate without committing to a particular date where you can access the funds.
How does a 60-day notice saver work?
These work similarly to a high interest savings accounts where you give 60 days notice to when you want to withdraw your funds. Once that term ends, your funds become available without any penalty charged to you.
It’s important to note that 60 days is quite a long time, almost two months. It’s important to time your cash flows and know your budgets properly to make the most out of a notice saver.
How do I compare two-month notice savers?
Notice savers can be very helpful in helping you reach your savings goals, but you should compare the features to make sure that you are able to maximise your savings potential:
- The interest rate. How much interest is being paid on your balance is very important if you are looking for an account that allows for a profit.
- Interest deposits. You can earn more quickly when interest is deposited into your notice saver account monthly. Check to see when deposits are made and if interest is also being applied to interest payments.
- Initial deposit. With some of the notice savers there will be a minimum deposit requirement in order to start the account.
- Account minimum. You might be required to keep a certain amount in the account in order to receive the full interest payment.
- Ability to add funds. You are permitted to add money to the balance when you have the opportunity.
Any pros and cons I should consider?
- Higher return on investment. Notice savers accounts typically offer a higher rate of interest than a standard savings account.
- Added flexibility. You have the option to take your money out of savings when you want so long as you provide the financial institution with 60 days notice.
- More opportunity to save. The ability to add money to the savings account gives you the chance to save even more. You could even set up recurring deposits from your transaction account if you need extra incentive to save.
- Variable rates. Variable interest rates on your savings can work both ways, but if they fall you will see a decrease in the amount of money your account is earning.
What are the risks?
When you are looking into any type of savings product, you first need to think carefully about what your goals are:
- Funds not liquid. If you keep your savings inside of the account for a long period of time, chances are you would have gotten a better benefit had you invested in a long term term deposit account.
- Variable interest. With a variable interest rate on your savings, if the rates do drop you stand the chance of losing on your monthly earnings, whereas with a term deposit the interest rate is unaffected by fluctuations in the market.