According to EY’s 2023 Global Wealth Research Report, which looked at the views of more than 2,500 individuals in 27 countries, protecting wealth against losses and inflation is a top priority in the current economic environment1. This has led to a third of people (33%) allocating more funds to their savings.
However, individuals may be missing out on earning higher rates of interest on their balances by holding cash in instant-access accounts. In July 2023, the best interest rates for instant-access savings accounts were around 4% (AER), while rates on notice and fixed-term accounts were upwards of 5% and 6% (AER) respectively2.
Investec recently increased the interest payable on funds held in our own Private Bank notice deposit accounts: the Voyage Reserve and 3-Month Reserve accounts. Unlike fixed-term products, these accounts allow withdrawals on request, following a notice period of one or three months respectively. “A notice product offers a balance between providing access to cash at a shorter interval, with the benefit of a higher interest rate than many easy-access accounts,” explains Head of Client Group Funding FJ Eigelaar.
This accessibility could be useful for those who are holding more cash in an easy-access bank account than they need. Behavioural economist Dr Alain Samson believes this is common. “Savers face an illiquidity risk from having their savings locked away and this can be associated with a perceived loss of control,” he explains. “Therefore, when it comes to liquid funds and emergency savings, people may pay insufficient attention to earning interest, even if they lose money in real terms due to inflation.”
While the savings strategy you use will depend on your short and long-term priorities, notice accounts can form a useful part of your strategy and should not be overlooked.
At Investec, savers with more than £1m in a Private Bank notice deposit account also benefit from higher interest rates.
“As a bank that specialises in supporting high-net-worth individuals, we recently tailored our notice accounts to help clients with higher balances by increasing the interest rate applied on deposits over £1m,” adds FJ. “While the savings strategy you use will depend on your short and long-term priorities, notice accounts can form a useful part of your strategy and should not be overlooked.”
The current interest rates available on Investec Private Bank notice deposit accounts
| Account type | Notice Period | Interest Rate £0.01 - £1,000,000 | Interest Rate £1,000,000.01 + |
|---|---|---|---|
| Voyage Reserve | One month | 3.25% gross p.a. / 3.20% AER (variable) | 5.00% gross p.a. / 4.89% AER (variable) |
| Account type | Notice Period | Interest Rate £0.01 - £1,000,000 | Interest Rate £1,000,000.01 + |
|---|---|---|---|
| 3 Month Reserve | Three months | 3.75% gross p.a. / 3.69% AER (variable) | 5.25% gross p.a. / 5.13% AER (variable) |
Interest is calculated daily and paid on a monthly basis.
For more information about how we can help you with savings, please get in touch today.
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