Interest rates on savings continue to rise continue to rise, as four new market-leading deals have been launched on the online platform, Raisin.
The market leading easy-access deal is being offered by UBL and pays 1.52 per cent can be opened with £2,000, with deposits protected up to £85,000 per person by the Financial Services Compensation Scheme.
It’s worth noting that savers can achieve higher via Virgin Money’s 1.56 per cent linked savings account, albeit only if they have a current account with the bank and only on balances up to £25,000.
Raisin is also offering an exclusive £25 bonus to all This is Money readers who sign up and deposit £10,000 for the first time via this link.
Top rates: Online platform Raisin has launched four new best-buy deals for savers
With the bonus included, someone depositing £10,000 in this UBL easy-access deal will effectively secure a rate of 1.77 per cent for one year equating to £177 in interest.
For those looking to put their money away for longer, Raisin has also launched an array of exclusive best-buy fixed rate deals, all offered by Ahli United Bank.
The most notable of these is its one year deal paying 2.55 per cent interest. The next best deal pays 2.4 per cent.
Someone depositing £10,000 via this Raisin link and securing the £25 bonus will effectively secure a one year return of 2.8 per cent, or £280 in interest.
Ahli United Bank is also offering a three year deal and five year deal via Raisin paying 2.9 per cent and 3 per cent respectively. Both are also eligible for the bonus.
Like with UBL, all of Ahli’s deals will protect deposits up to £85,000 under the FSCS.
Easy access or fixed term?
For those who may need access to their savings within the next 12 months, easy-access will be best.
Given the cost of living squeeze, it’s all the more important to have some easily accessible money to act as a financial cushion to deal with unforeseen events.
However, for those who already have a financial cushion built up and are not planning on using their excess cash towards a large expenditure or investment in the near future, then fixed rate savings could make sense.
| Type of account (min investment) | 0% tax | 20% tax | 40% tax | ||
|---|---|---|---|---|---|
| UBL Bank (£2,000+)** | 1.52 | 1.22 | 0.91 | ||
| Yorkshire BS Internet Saver Plus 11 (£10,000+) | 1.33 | 1.06 | 0.80 | ||
| Cynergy Bank Online Easy Access 51 (£1) (1) | 1.32 | 1.06 | 0.79 | ||
| Al Rayan Bank Everyday Saver 2 (£2,500+)(3) | 1.31 | 1.05 | 0.79 | ||
| Gatehouse Bank (£1,000+) (3) | 1.30 | 1.04 | 0.78 | ||
| Marcus by Goldman Sachs (£1+) (2) | 1.30 | 1.04 | 0.78 | ||
| Saga Easy Access Savings (£1+) (2) | 1.30 | 1.04 | 0.78 | ||
| Zopa Smart Saver (£1+)* | 1.30 | 1.04 | 0.78 | ||
| *Available through banking app only. Maximum investment with Zopa is £15,000 | |||||
| ** Deal is exclusive via savings platform, Raisin. Signup via the link and deposit £10,000 or more and you’ll receive a £25 welcome bonus | |||||
| (1) Rates includes a 1.02 percentage point bonus payable for the first 12 months | |||||
| (2) Rate includes a 0.25 percentage point bonus payable for the first 12 months. | |||||
| (3) This rate is the ‘expected profit rate’ under Sharia compliant accounts. | |||||
With interest rates continuing to rise and with the Bank of England expected to up the base rate further over the coming months, it may be sensible to fix for no longer than a year.
That way, if rates continue to improve you could switch to an even better one in 12 months’ time.
It’s worth noting that with UBL’s easy-access deal, the interest rate is variable and therefore could be reduced or increased.
Ahli United Bank’s deals are all fixed for a period of one to three years meaning savers will have certainty over the return.
However, because this savings account is fixed, withdrawals are not permitted before the end date, unless under exceptional circumstances such as the account holder becoming mentally incapacitated or bankrupt.
UBL’s deal allows for instant access as and when required. There are no limits to the amount of withdrawals savers can make, it isn’t possible to withdraw less than £500 in a single transaction and a withdrawal will not be authorised if it leaves a balance below £1,000.
| Type of account (min investment) | 0% tax | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| ONE YEAR | ||||||||||
| Ahil United Bank (£1,000+) * | 2.55 | |||||||||
| Al Rayan Bank (£5,000+) (1) | 2.40 | |||||||||
| Investec (£5,000) | 2.40 | |||||||||
| TWO YEARS | ||||||||||
| Al Rayan Bank (£5,000+) (1) | 2.89 | |||||||||
| Cynergy Bank (£10,000+) | 2.88 | |||||||||
| Ahil United Bank (£1,000+) * | 2.87 | |||||||||
| THREE YEARS | ||||||||||
| Ahil United Bank (£1,000+) * | 2.90 | |||||||||
| Cynergy Bank (£10,000+) | 2.90 | |||||||||
| FIVE YEARS | ||||||||||
| Ahil United Bank (£1,000+) | 3.00 | |||||||||
| United Trust Bank (£5,000+) | 2.90 | |||||||||
| * Deal is exclusive via savings platform, Raisin. Signup via the link and deposit £10,000 or more and you’ll receive a £25 welcome bonus. You will need to claim via email for the £25 bonus to be paid. | ||||||||||
| (1) This rate is the ‘expected profit rate’ under Sharia compliant accounts. The bank monitors the target profit on a daily basis to ensure it is achievable. | ||||||||||
With inflation running at 9 per cent, even these best-buy deals are no match.
But they are better than most easy access accounts with the big banks, where the majority of savers still have their cash.
As many as four in five easy-access savers still keep their cash in accounts paying less than 0.1 per cent interest, according to analysis by Paragon Bank.
People may feel more comfortable keeping their money with household names such as HSBC and Barclays than they would with a lesser-known challenger bank.
However, the challenger banks that make up the best buys on the market come with the same protections as the big names.
Who are the new best buy providers?
Both UBL and Ahli United Bank are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
UBL UK was formed in 2001 from the merger of the UK branches of two banks, United Bank Limited and National Bank of Pakistan, which had been operating in the UK since the mid-1960s.
Ahli United Bank of Kuwait was founded in 1971, originally as United Bank of Kuwait in the UK and then as Ahli United Bank in 2000 as a result of a merger of United Bank of Kuwait and Al-Ahli Commercial Bank. It currently has 151 branches located across eight countries.
James Blower, founder of the Savings Guru said: ‘While they might not be a household name, Ahli United Bank has a longer history than most of the banks topping the best buy tables so savers shouldn’t be concerned about saving with them.
‘Raisin is also well established in the UK and has a good track record and we have not had any complaints from our savers who have used the platform.’
THIS IS MONEY’S FIVE OF THE BEST CURRENT ACCOUNTS
Lloyds Bank’s Club Lloyds account will pay £125 when you switch. There is a £3 monthly fee but this is waived if you pay in at least £1,500 each month. You also earn monthly credit interest on balances up to £5,000 and can choose a reward each year, including 6 cinema tickets.
Virgin Money’s M Plus Account offers £20,000 Virgin Points to spend via Virgin Red when you switch and pays 2.02 per cent monthly interest on up to £1,000. To get the bonus, £1,000 must be paid into a linked easy-access account paying 1% interest and 2 direct debits transferred over.
HSBC’s Advance Account pays £170 when you switch to the account. You need to set up two direct debits or standing orders and pay in at least £1,500 into the account within the first 60 days.
First Direct will give newcomers £150 when they switch their account. It also offers a £250 interest-free overdraft. Customers must pay in at least £1,000 within three months of opening the account.
Nationwide’s FlexDirect account comes with up to £125 cash incentive for new and existing customers. Plus 2% interest on up to £1,500 – the highest interest rate on any current account – if you pay in at least £1,000 each month, plus a fee-free overdraft. Both the latter perks last for a year.
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