There’s something (relatively) new out there for term deposit investors. Several Australian banks are offering Notice Saver accounts.
Notice saver accounts are similar to term deposits. How it works is that you deposit your money with a financial institution and get access to that money not at call, or at the end of a fixed term, but by giving a certain period notice –which is usually at least 31 days. If you don?t give notice, the money stays invested earning the notice saver interest rate.
While the number of accounts on offer in Australia is not currently large, it is likely that this will change in the medium future, thanks to APRA?s new Liquidity Coverage Ratio. This makes it more attractive for financial institutions to hold deposits which are there for at least 30 days (and therefore not at-call). There may be a push to encourage savers to ditch their at-call account and head for a Notice Saver account instead.
So – what are some pros and cons of Notice Saver accounts?
We expect to see more Notice Saver accounts on offer in Australia over time. So watch this space.
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