A notice savings account requires you to give the bank advance warning before you withdraw money
A notice savings account is a savings product where the bank asks you to notify them a set number of days before you take out a large amount of money. The most common notice period is 30 days, though some accounts require 60 or 90 days. In exchange for agreeing to wait, the bank pays you a higher interest rate than you would get in a regular savings account.
The trade-off is straightforward: you get better returns on your money, but you lose immediate access to it. If you need cash before the notice period ends, you can usually withdraw it anyway—but the bank may charge a penalty, reduce your interest rate, or close the account. The exact consequences depend on the bank's terms.
Notice accounts are less common in the United States than they are in the UK or Canada, but some banks and credit unions still offer them. They sit between a regular savings account (which lets you withdraw anytime) and a certificate of deposit or CD (which locks your money away for a fixed term).
Key Takeaways
- Notice savings accounts pay higher interest rates than regular savings accounts because you agree to give the bank advance notice before large withdrawals.
- The notice period is typically 30, 60, or 90 days, depending on the account terms set by your bank.
- You can usually withdraw money before the notice period ends, but you may face penalties such as lost interest or account closure.
- These accounts work best if you have money you do not need immediately but want to access faster than a CD would allow.
How the notice period works in practice
When you want to withdraw money from a notice account, you contact your bank and formally request the withdrawal. The bank then starts counting the notice days. During that waiting period, your money stays in the account and continues to earn interest. Once the notice period ends, you can withdraw the funds without penalty.
The notice period applies only to withdrawals above a certain threshold—often $500 or $1,000, depending on the bank. Small withdrawals below that amount usually go through immediately. This means you can still access some of your money quickly if you need it for everyday expenses, but larger sums require planning.
Some banks allow you to give notice and then change your mind before the period ends. Others require you to complete the withdrawal once notice has been given. Read your account agreement carefully to understand what happens if you cancel a withdrawal request partway through.
Interest rates and how they compare
Notice accounts typically pay 0.5% to 2% more in annual interest than a standard savings account, though the exact rate varies by bank and changes with market conditions. A regular savings account might pay 0.01% to 0.5%, while a notice account at the same bank could pay 1% to 2.5%. The longer the notice period, the higher the rate tends to be—a 90-day notice account usually pays more than a 30-day one.
The interest rate is not may provide to stay the same. Banks can change the rate at any time, and many notice accounts have variable rates that move with the market. Some banks offer a fixed rate for a set period, but this is less common. Before opening an account, ask whether the rate is fixed or variable and how often it changes.
To decide whether a notice account makes sense for you, compare the interest rate to what you would earn in a CD or money market account at the same bank. If the rate difference is small and you value having faster access to your money, a regular savings account might be the better choice.
Penalties for early withdrawal
If you withdraw money before the notice period ends, the bank's penalty depends on its specific rules. Common penalties include forfeiting all or part of the interest you have earned, paying a flat fee, or losing the account's higher interest rate going forward. Some banks close the account entirely if you withdraw early, though this is less common.
The penalty structure should be spelled out in your account agreement or disclosure statement. Before you open the account, ask the bank what happens if you need to withdraw early. This matters because the penalty could wipe out the extra interest you earned, making the account pointless.
A few banks offer "penalty-free" notice accounts where you can withdraw early without losing interest, but these are rare and usually come with a lower interest rate to compensate. If you see one advertised, read the fine print—there may be other restrictions, such as a limit on how many penalty-free withdrawals you can make per year.
When a notice account makes sense for your situation
A notice account works best if you have money you know you will not need for at least 30 to 90 days but want to keep it accessible faster than a CD would allow. For example, if you are saving for a car down payment you plan to make in four months, a notice account lets you earn more interest than a regular savings account while still being able to access the money if an emergency comes up.
Notice accounts are less useful if you need to access your savings frequently or unpredictably. If you have an emergency fund, it should stay in a regular savings account where you can withdraw instantly without penalty. Notice accounts are better suited to money you are setting aside for a specific goal on a known timeline.
They also make less sense if you can find a CD with a rate that is only slightly lower and a term that matches your timeline. A CD locks your money away, but it guarantees the rate and removes the temptation to withdraw early. For some people, that certainty is worth the loss of flexibility.
Finding and opening a notice savings account
Not all banks offer notice accounts, so you may need to shop around. Start by checking whether your current bank has one—if not, search online for "notice savings account" along with your state or region. Credit unions sometimes offer them, and some online banks do as well. Compare the interest rates, notice periods, and early withdrawal penalties across at least three institutions before deciding.
When you find an account you are interested in, request the full account agreement or disclosure statement. This document will tell you exactly how the notice period works, what the penalties are, and whether the interest rate is fixed or variable. Do not rely on the bank's website summary—the full agreement is where the details that matter are spelled out.
Opening the account is usually straightforward: you provide your identification, Social Security number, and initial deposit, just as you would with any savings account. Some banks let you open online, while others require you to visit a branch or call. Ask whether there is a minimum opening deposit and whether there are any monthly fees.
Frequently Asked Questions
Can I withdraw money from a notice account without giving notice?
Yes, but you will likely face a penalty. Most banks allow immediate withdrawal but charge a fee or reduce your interest rate. Some close the account if you withdraw early. Check your account agreement to see what your specific bank does.
What is the difference between a notice account and a CD?
A CD locks your money for a fixed term (three months to five years) and guarantees the interest rate. A notice account lets you withdraw anytime but requires advance notice for large amounts and pays a variable rate. CDs are better if you want certainty; notice accounts are better if you want flexibility.
Do I lose all my interest if I withdraw early?
It depends on the bank. Some charge a flat fee, others reduce your interest rate, and some forfeit all accrued interest. A few banks offer penalty-free withdrawals but usually at a lower rate. Always ask about the specific penalty before opening the account.
Is a notice account FDIC insured?
Yes, if the bank is FDIC-insured, your notice account is covered up to $250,000, just like a regular savings account. Check your bank's website or call to confirm it is FDIC-insured before you open the account.
How long does it take to get my money after the notice period ends?
Once the notice period expires, the withdrawal usually processes within one to three business days, depending on the bank and whether you are transferring to another account or requesting a check. Ask your bank for the exact timeline when you give notice.