Just about everyone likes to save money – but we also like to spend it too. If you are working hard and putting away cash, you deserve a pat on the back for being responsible, and keeping your impulses on check. But let’s face it, we all stumble now and then and dip into those savings for “something we just absolutely have to have,” like a trip to Mexico when we’re freezing in January, or a new car that has completely seduced us. One way to avoid those impulsive purchases and make some respectable money in the process is to put our savings into a notice deposit account. Not very common in the United States, notice deposit accounts are primarily to be found in the United Kingdom. They are special accounts offering competitive interest rates that require advance notice before money can be withdrawn from them. If you have a 50-day notice deposit account, you won’t be able to access your money for 50 days. That will give your urges plenty of time to cool down. In the end, you might find you didn’t need that impulse purchase after all.
Clearly, notice deposit accounts are the right fit for people and businesses that don’t need their money right away. Like savings accounts, they are a place to “park” our money, but they typically offer higher interest rates than the average savings account. That’s a good thing. The limitations placed on accessing the money could be a problem if you suddenly find yourself in need of all your funds. In order to prepare for such a situation, it’s probably a good idea to have enough money available somewhere else, like a typical savings account.
If you would like to learn more about notice deposit accounts, sit down with your financial advisor or a qualified bank representative and ask them as many questions as you need.