In banking terminology, the term Notice Deposit refers to a fixed term certificate of deposit or a savings account held with a financial institution that permits withdrawals without penalty only after advance notification is given. Also known as a Notice Account.
For example, a Notice Deposit placed into a three month certificate of deposit or CD with a bank might be used by an individual or business when they wish to save excess funds that they do not anticipate requiring during that three month time frame. Nevertheless, if a need for the deposited funds does arise in those three months, then they can provide their financial institution with the required advance notice in order to withdraw the funds they need without a penalty being charged. The advance notice periods required by most financial institutions for Notice Deposits typically ranges from one day to a week prior to the anticipated withdrawal being made.