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Easy access savings account rates beat notice accounts

15 August 2009 / by Andy Davies

Easy access savings accounts are now offering higher interest rates than notice savings accounts, according to Moneyfacts.co.uk.

Since United National Bank reduced the interest rate on its 3 Month Gold Deposit Account by 0.50 per cent to 3.00 per cent, Egg now offers a higher interest rate on its instant access savers account, which offers an interest rate of 3.25 per cent.

Customers can open an Egg easy access account with a £1 deposit, while the Citi Flexi Saver account offers an interest rate of 3.10 per cent AER, also with a £1 deposit.

Commenting on the news, Michelle Slade, spokesperson at Moneyfacts.co.uk says that although notice savings accounts have historically offered much higher rates than easy access accounts, Moneyfacts has found that 30 per cent of customers are now looking for easy access savings.

She said: "Providers are increasingly turning to their savings books to fund their lending activity. Those unable to compete in the ever competitive fixed rate bond market have moved to offering top rates on easy access."

Ms Slade added: "There is now no incentive for savers to invest their money in a notice account when they can get better rates and access to their money as soon as they need it."

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ProviderAccountInterest Rate (AER)TermApply
1.30%Instant AccessMore Info >
MARKET LEADING. Earn 1.30% gross/AER. Instant Access. No notice periods. Unlimited payments and withdrawals. Pay in from £100. RCI Bank are protected up to a total of €100,000 by the FGDR, the French deposit protection scheme. Manage account online.
1.27%Instant AccessMore Info >
Earn 1.27% gross/AER variable. Open with £1. Unlimited free withdrawals. Interest paid monthly or annually. Manage your account online. Rate includes a 1.02% gross fixed rate bonus for 12 months from account opening. After 12 months the rate will revert to underlying rate, currently 0.25% gross/AER variable. FSCS protected

1.17%

£1More Info >
Earn 1.17% AER variable interest. Interest can be paid monthly or annually. Open an account singly or jointly. Minimum deposit £1. Unlimited deposits and withdrawals permitted. FSCS Protected
0.75%Easy AccessMore Info >
0.75% gross/AER on balances from £1,000 to £1 million. Guaranteed to be at least 0.50% above Base Rate** until 31st December 2017. Unlimited withdrawals without restriction or loss of interest.

Gross is the interest you will receive before tax is deducted.

AER stands for the Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year.