RaboDirect Notice Saver
RaboDirect has just released a new type of savings product into the Australian market known as the Notice Saver. The name 'Notice Saver' comes from the fact that it's like a savings account, but where you have to give notice to RaboDirect if you want to withdraw any money from it.
The RaboDirect Notice Saver is best described as a cross between a high interest savings account and a term deposit. So you get the benefits of a good interest rate, but also the control of a term deposit because you can't access your money for impulse purchases.
How Does It Work?
There are three products to choose from: Notice Saver 31, Notice Saver 60 and Notice Saver 90. The numeral represents the number of days notice you need to give to withdraw your money - importantly it is not an investment period.
If you had a Notice Saver 31 account and decided you needed to withdraw some money from that account you would advise RaboDirect and after 31 days you would be able to make the withdrawal. This means considerably more flexibility that a term deposit where your investment period is fixed.
What About The Interest?
The first thing to note about the interest on the Notice Saver account is that it is variable. This is unlike a term deposit where the interest rate is fixed.
Each of the Notice Saver products has a different interest rate. The Notice Saver 90 has the highest variable interest rate with the other two accounts having slightly lower interest rates. The highest interest rate is for accounts with up to $250,000. For higher balances there is a tiered reduction in the interest rate. For the latest rates please check our up to date product page about the RaboDirect Notice Saver.
Interest is calculated daily and paid monthly.
What Are The Fees?
There are absolutely no fees with the Notice Saver accounts. So there's no cost or investment to open one of these accounts - just a high interest rate with a measure of control built in. It also means that you can use it as you need to, so if you have no money in the account for a few months that's no problem, you won't pay a monthly fee. RaboDirect suggests you just leave your account open rather than cancel it and come back and use the account when you're ready.
Who Can Open An Account?
Notice Saver accounts can be opened by any Australian resident over 18 years old. The added flexibility of these accounts is that they can be opened by personal customers, businesses, trusts and even self managed super funds (SMSF).
If you want to get tricky with managing your money you can open up to three Notice Saver accounts - although only a maximum of one of each type i.e 1 x Notice Saver 31, 1 x Notice Saver 60 and 1 x Notice Saver 90.
RaboDirect is an online bank and all applications are done online.
How Do The Transfers Work?
If you want to transfer money out of your Notice Saver you log in to your online banking at least 31 days prior to wanting the money. The interface is similar to most online banking platforms where you select the amount to transfer and submit the instruction.
There are also a few other things to remember: Firstly that any submission given after 4pm won't count as a full day's notice, so factor that into the 31, 60 or 90 days you need to allow. Secondly, transfers will also only be done on business working days.
You can cancel instructions for a transfer as long as it is before 12am on the day before the transfer is due. If for some reason you want to cancel a transfer but forget to do so the money will be transferred out of your Notice Saver account, but you can just transfer it straight back in.
You can set up as many transfers in your account as you like - as long as you have the money to cover them all!
What If You Really Need The Money?
Sorry, you can't get it. The Notice period on this account means that you can't access it before the nominated period of your account. It is recommended to have some money in a more accessible account (like a high interest savings account) so that you have available money if you need it.
If you are suffering financial hardship RaboDirect can release funds early. But to get this you will need to furnish a statutory declaration as evidence. And that's a whole lot of trouble, so you're much better off avoiding that scenario if you can.
If you like the concept of the Notice Saver, it's available to order now on RaboDirect website.