A notice savings account requires you to tell the bank before you withdraw money
A notice savings account is a savings account where you must give the bank advance warning — usually 30, 60, or 90 days — before you take money out. If you withdraw without that notice, the bank charges a penalty, usually a loss of interest or a flat fee. The tradeoff is that the bank pays you a higher interest rate than it would on a regular savings account, because it knows your money will stay there longer.
The notice period is the core mechanic. You submit a withdrawal request, the clock starts, and only after the waiting period ends can you actually move the money. During that time, your account keeps earning interest at the agreed rate. If you need the money before the notice period is up, you can usually still withdraw it — but you forfeit the interest you would have earned, or pay a penalty instead.
Notice accounts are less common in the United States than they once were, but some banks and credit unions still offer them, particularly for larger balances. They sit between a regular savings account (when ready access, lower rates) and a certificate of deposit (locked funds, higher rates).
Key Takeaways
- You must notify your bank 30, 60, or 90 days before withdrawing money, depending on the account terms.
- The bank pays higher interest rates on notice accounts because your deposits remain in place longer.
- Withdrawing before the notice period ends usually costs you either forfeited interest or a penalty fee.
- The notice period continues to earn interest, so the longer you wait, the more you earn before you access the funds.
- Notice accounts are most useful if you have money you do not need when ready but want better returns than a standard savings account offers.
How the notice period actually works
When you decide you want your money, you contact the bank and request a withdrawal. The bank records the date and starts the countdown. If your account requires 60 days' notice, you cannot touch that money for 60 days from the date you submitted the request. The interest continues to accrue during the waiting period — that is the incentive for waiting.
On day 61, the funds become available. You can then transfer them out, withdraw them in cash, or move them to another account. Some banks allow you to cancel the withdrawal request during the notice period if you change your mind, and your money stays in the account earning interest. Others lock in the request once submitted.
If you need the money before the notice period ends, you have two options. You can wait out the period anyway. Or you can ask the bank to release the funds early — most will do this, but they will charge a penalty. The penalty might be a certain number of months' worth of interest, a percentage of the withdrawal amount, or a flat fee. The exact cost depends on the bank's terms.
Interest rates and why banks offer them
Notice accounts pay more interest than regular savings accounts because the bank gets predictability. When you commit to giving notice before withdrawing, the bank knows roughly how long it can lend out or invest your money. That certainty has value. The bank can use your deposit for longer-term lending or investments, which generate more income, so the bank shares some of that extra income with you as higher interest.
The interest rate is usually fixed for the life of the account, or it changes only when the bank changes its rates across all notice accounts. You do not negotiate the rate individually. The rate varies by bank and by the notice period — a 90-day notice account typically pays more than a 30-day one, because the bank gets more certainty.
Interest compounds according to the account terms — some accounts compound daily, others monthly or quarterly. The longer your money sits untouched, the more interest you earn, and the more that interest itself earns interest.
Notice accounts versus other savings options
A regular savings account has no notice requirement. You can withdraw whenever you want, but the interest rate is lower — often 0.01% to 0.5% depending on the bank and current market conditions. You trade flexibility for lower returns.
A certificate of deposit (CD) locks your money away for a fixed term — 3 months, 6 months, 1 year, 5 years. You cannot withdraw early without a penalty. In exchange, CDs pay higher interest than notice accounts. A notice account sits in the middle: more flexibility than a CD, higher rates than a regular savings account.
A money market account is another middle ground. It usually offers higher interest than a regular savings account and allows some withdrawals without notice, though there are often limits on how many withdrawals you can make per month. The rates are typically lower than notice accounts.
| Account Type | Withdrawal Access | Typical Interest Rate | Best For |
|---|---|---|---|
| Regular Savings | Anytime | 0.01%–0.5% | Emergency funds, frequent access |
| Notice Savings | After 30–90 days' notice | 0.5%–2%+ | Money you will not need soon |
| Money Market | Limited withdrawals per month | 0.5%–2%+ | Moderate access with decent rates |
| Certificate of Deposit | Locked until maturity | 1%–5%+ | Money you will not touch for months or years |
When a notice account makes sense
A notice account works well if you have a specific goal with a known timeline. For example, you are saving for a down payment on a house in two years, or you want to set aside money for a major purchase you are planning in 18 months. You know you will not need the money before then, so you can commit to the notice period and earn a better rate than a regular savings account offers.
Notice accounts also suit people who want to discourage themselves from dipping into savings. The friction of the notice period — the waiting, the penalty if you break it — can be a useful brake on impulse withdrawals. If you have a history of raiding your savings for non-emergencies, the structure of a notice account can help you stick to your goal.
They are less useful if you might need the money on short notice, or if you are building an emergency fund. Emergency funds need to be accessible when ready, and a notice account defeats that purpose. Similarly, if interest rates are rising and you think rates will be higher in a few months, locking into a notice account now might not be the best move — you could get a better rate later.
Penalties and what they cost you
If you withdraw before the notice period ends, the penalty is usually one of three types. Some banks charge a flat fee — for example, $25 or $50 per early withdrawal. Others charge a loss of interest — you forfeit the interest you would have earned for a certain period, such as three months' worth. A third type charges a percentage of the amount withdrawn, such as 0.5% or 1%.
The penalty structure is set when you open the account and is spelled out in the account agreement. Before you open a notice account, read that section carefully. A $25 flat fee might be worth paying if you need $10,000 early, but it stings less on a $500 withdrawal. A loss of three months' interest might be steep if rates are high, but negligible if rates are low.
Some banks allow you to cancel a withdrawal request after you have submitted it but before the notice period ends. If you cancel, the money stays in the account and keeps earning interest. This is useful if you change your mind or if circumstances change. Not all banks offer this option, so ask before you commit.
How to find and open a notice savings account
Not all banks offer notice accounts. The largest national banks often do not; they focus on regular savings accounts and CDs. Credit unions are more likely to offer them, as are some online banks and regional banks. You can search your bank's website for "notice savings account" or "notice account" to see if they offer one.
When comparing accounts, look at the interest rate, the notice period (30, 60, or 90 days), the minimum balance required to open the account, and the penalty structure for early withdrawal. Some accounts require a minimum deposit of $500 or $1,000; others have no minimum. The higher the minimum, the more the bank expects you to keep there.
Opening a notice account is the same process as opening any savings account: you provide identification, a Social Security number, and an initial deposit. The bank will explain the terms, including the notice period and penalties, before you sign. Make sure you understand the terms before you commit, because you cannot change them once the account is open.
Frequently Asked Questions
Can I withdraw money from a notice account without waiting for the notice period?
Yes, but it costs you. You can request an early withdrawal, and the bank will usually allow it, but you will pay a penalty — either a flat fee, forfeited interest, or a percentage of the amount withdrawn. The exact penalty depends on your bank's terms. Some banks let you cancel the withdrawal request before the notice period ends if you change your mind.
Does the interest rate on a notice account change?
The rate is usually fixed for the life of the account, but banks can change rates on new accounts or across all notice accounts if market conditions shift. Your existing account keeps the rate you signed up for unless the bank explicitly changes it. Check your account agreement or call the bank to confirm how rate changes work.
What happens if I do not withdraw the money after the notice period ends?
Nothing. The money stays in the account and keeps earning interest. You do not have to withdraw it just because the notice period is over. You can leave it there indefinitely, or submit another withdrawal request whenever you actually need the funds.
Is a notice account FDIC insured?
Yes, if the bank is FDIC-insured. Notice accounts are treated like regular savings accounts for insurance purposes. Your deposits are covered up to $250,000 per account owner, per bank. If you have multiple accounts at the same bank, the insurance limit applies across all of them combined.
How much interest will I actually earn?
That depends on the rate the bank offers, how much you deposit, and how long you leave the money untouched. If a notice account pays 1.5% annual interest and you deposit $10,000, you earn about $150 per year if the money sits there the full year. The exact amount also depends on how often interest compounds — daily compounding earns slightly more than monthly or quarterly compounding.