Al Rayan Bank ups its easy-access savings rate to 1.8% knocking Virgin Money off the best-buy top spot
- Savers will need at least £5,000 in order to open an account
- Deposits are protected up to £85,000 by the FSCS deposit guarantee scheme
- Al Rayan Bank currently serves more than 90,000 customers throughout the UK
Savers can now stash cash in an easy-access savings deal paying 1.8 per cent, after a challenger bank upped its rates once again.
Al Rayan Bank’s everyday saver is offering the market-leading easy access savings rate. It provides instant access to savers, with no notice required to make withdrawals and no limit on the number a saver can make.
Savers will need at least £5,000 in order to open an account, with deposits protected up to £85,000 by the Financial Services Compensation Scheme, the UK’s deposit guarantee scheme.
King of savings:
Someone depositing £20,000 into the account could expect to earn £360 return after one year.
The move has fired Al-Rayan to the top of our independent best savings rate tables.
It follows moves last week by Virgin Money, which upped easy-access linked saver to 1.71 per cent on balances up to £25,000.
After that the next best easy-access deals are offered by Sainsbury’s Bank and Yorkshire Building Society, both paying 1.55 per cent.
Some savers may be worried about putting their cash into a lesser known bank that they may not have heard of.
Al Rayan Bank is the oldest and largest Islamic bank in the UK, Founded in 2004, the Bank is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority.
The bank currently serves more than 90,000 customers throughout the country and is the only Islamic bank in the UK to receive a public credit rating.
Instead of paying an interest to savers, Al Rayan Bank – as an Islamic bank – invests customers’ deposits in ethical, Sharia compliant activities to generate a profit.
Such profit rates deliver a Sharia-compliant expected return rather than interest, as with standard accounts. Since the Bank was founded in 2004 it has always paid at least the profit rate it has quoted to its customers.
What about fixing your savings instead?
Although Al Rayan’s easy-access deal is a best buy savers can do better if they are prepared to fix their money for six months or more – losing access in the interim.
The best one-year deal pays more than 1 percentage point more than Al Rayan’s deal. Charter Savings Bank is currently paying 2.83 per cent.
However, studious savers will be conscious that the Bank of England may hike the base rate once again on Thursday, with some suggesting it could rise from 1.25 per cent to 1.75 per cent.
Savers bracing for better deals ahead many may want to refrain from fixing their cash away for long periods of time.
Easy-access deal can therefore make a great way to remain able to react and move cash to another account if and when better deals arrive.
However, for savers deciding between the convenience of an easy-access account and better returns on offer from fixed-rate deals could pick an option in the middle.
Investec has launched a market leading 90-day notice savings account paying 2.1 per cent on balances of between £5,000 and £250,000. Saver deposits are protected up to £85,000 per individual under the FSCS.
A notice account is a halfway house between an easy-access and fixed rate account. They enable savers to withdraw their funds following a notice period, typically ranging between 30 and 120 days, but can offer savers a better return than they might otherwise achieve with an easy-access account.
The Investec 90-Day Notice Saver, which can be opened online, offers the highest rate of interest of any notice savings accounts currently available and pays interest on a monthly basis.
It also offers unlimited deposits and withdrawals, albeit subject to a 90-day notice period.
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