A new type of savings account starting to appear in the banking market will give people more options when it comes to organising their savings.
RaboDirect, Investec and Westpac have all launched "notice accounts", which combine the features of at-call savings accounts and term deposits. The emergence of these new accounts has been driven, in part, by changes to banking regulations. Other deposit takers are expected to launch similar offerings.
Saving remains a high priority for Australians. According to the latest INGDirect Financial Wellbeing Index, the median household savings level has increased from less than $8000 in the March quarter last year to the current level of $15,427.
Households are continuing to build their savings, despite recent falls in interest rates.
RaboDirect's new account, Notice Saver, allows customers to make regular deposits and has no maturity date. When depositors want to get their money out they have to give notice, with period options of ; 31, 60 or 90 days.
When the notice date is reached, depositors can take out some or all of their money. They can cancel their notice before the date is reached. The account remains open after a notice period as long as there is still money in it.
Notice Saver rates are variable. Group executive of RaboDirect Australia and New Zealand Greg McAweeney says interest rates are competitive with term deposit rates.
McAweeney says Notice Saver will fill a gap in the savings market. The bank's research shows that many people struggle to reach their savings goals because they dip into their at-call savings to cover unexpected expenses or make impulse purchases.
Investec launched its Liberty 32 Day Notice account in 2011. As with the RaboDirect account, depositors must give notice before making a withdrawal. Unlike RaboDirect, it offers only one notice period.
Investec's head of retail deposits Shehan Rajakumar says customers like the fact that returns are similar to term deposit rates and they can make deposits at any time.
"That helps them with their cash management," Rajakumar says.
Westpac's notice period account, called Evergreen, was launched earlier this year. It is managed by the bank's institutional division and is open to corporate and high-net-worth individuals. It offers notice periods of 31, 60, 90 and 180 days.
Westpac's head of corporate cash management Daniel Moses describes Evergreen as a revolving term deposit, which gives customers access to high rates and a greater degree of flexibility in managing their funds.
The emergence of notice period accounts is an example of how changes to banking regulations affect product design. In the aftermath of the GFC, global regulators drew up new prudential standards for banks called Basel III.
A rule that will take effect in 2015 requires authorised deposit-taking institutions to maintain an adequate level of high-quality liquid assets that can be converted into cash to meet liquidity needs, such as customer withdrawals, for 30 days (in case the world's money markets go down again, as in 2008).