Best savings rates: New easy-access deal at 1.6%

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Savers can now stash  cash in an easy-access savings deal paying 1.6 per cent, after a challenger bank upped its rates.

Al Rayan Bank is the new market leading deal via a new issue of its everyday saver, providing instant access to savers. 

It follows moves earlier this week by Zopa Bank and The Family Building Society, which both upped easy-access rates to 1.5 per cent.

It also trumps the 1.5 per cent rate from Chase Bank with its linked account for current account customers.  

Easy-access rates have been on the rise in recent weeks and months following the quickfire Bank of England Base rate rises.

With the Al Rayan deal, savers can only open an account online and will need at least £5,000 to get started.

There is no notice required to make a withdrawal and no limit to the number of withdrawals a savers can make.

Someone depositing the maximum £10,000 into the account could expect to earn £160 return after one year.

Deposits with Al Rayan Bank are protected up to £85,000 by the Financial Services Compensation Scheme, the UK’s deposit guarantee scheme. 

What is Al Rayan Bank? 

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. 

Profit rates are expected; however, since the Bank was founded in 2004 it has always paid at least the profit rate it has quoted to its customers.

Is this the best deal possible?

For those looking to save £5,000 or more in an easy-access account, this deal will be the most lucrative.

Anyone looking to save less than that would be wise to consider Zopa Bank’s 1.5 per cent deal which can be opened with just £1.

However, for anyone with a spare £10,000, the savings platform Raisin is currently offering a promotional offer exclusively via This is Money that would make it home to the most lucrative deal.

It offers savers the chance to boost their savings by £25 when they open and fund an account on its marketplace with a minimum of £10,000.  

Its best easy-access deal offered via Hoist Savings pays 1.5 per cent.* Deposit £10,000 via the link and receive the £25 bonus and you effectively earn 1.75 per cent for the first year.

HoistSavings is the savings arm of Hoist Finance, and all eligible deposits made into HoistSavings savings accounts are protected by the Swedish deposit guarantee scheme, and up to a total of SEK 1,050,000 per person – a similar level to the £85,000 protected by the financial services compensation scheme in the UK.

As for a saver who is prepared to lose the instant access element in search of better rates, they may wish to consider a notice account.

A notice account is a half way house between an easy-access and a fixed rate deal often requiring a notice period of between 30 and 120 days to access savings.

QIB UK is currently offering a 95 day notice account paying 1.95 per cent* through the savings platform, Raisin UK.

After a £10k deposit and £25 bonus, savers will essentially be securing a 2.2 per cent return on the QIB UK deal. Albeit, they’ll have to give 95 days notice to access their cash. 

All of Raisin’s partner banks are fully regulated in the UK and in the event that Raisin ceases trading, your deposits, would be protected by the FSCS up to £85,000 per person, per banking group, or up to a similar amount through the equivalent European deposit guarantee scheme.

No rates currently come close to beating inflation. However, with competition improving, there are far more options for savers looking to escape the big banks and rates which are still as low as 0.01 per cent.