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Al Rayan ups easy-access savings rate to best-buy 1.8%

Al Rayan Bank increases its easily accessible savings rate to 1.8%, pushing Virgin Money off the top best-buy position

  • Savers need a minimum of £5,000 to open an account
  • Deposits are protected up to £85,000 by the FSCS Deposit Guarantee Scheme
  • Al Rayan Bank currently serves over 90,000 customers across the UK

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Savers can now stash cash in an easily accessible savings deal that pays 1.8 percent, after a challenger bank raised its rates again.

The daily saver of Al Rayan Bank offers the market-leading easy access savings rate. It offers instant access to savers, with no prior notice to withdraw funds and there is no limit on how many a saver can make.

Savers need a minimum of £5,000 to open an account, with deposits up to £85,000 protected by the Financial Services Compensation Scheme, the UK’s deposit insurance scheme.

King of savings:

King of savings:

Someone who deposits £20,000 into the account can expect a return of £360 after a year.

This move has propelled Al-Rayan to the top of our independent charts of the best savings rates.

It follows Virgin Money’s moves last week, which increased the easy-access linked saver to 1.71 percent on deposits up to £25,000.

After that, the next best easily accessible deals are offered by Sainsbury’s Bank and Yorkshire Building Society, both of which pay 1.55 percent.

Some savers may be concerned about putting their money into a lesser-known bank that they may not have heard of.

Al Rayan Bank is the UK’s oldest and largest Islamic bank, established in 2004, authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority.

The bank currently serves more than 90,000 customers across the country and is the only Muslim bank in the UK to receive a public credit rating.

Instead of paying interest to depositors, Al Rayan Bank – as an Islamic bank – invests customers’ deposits in ethical, Shariah-compliant activities to generate profits.

Such rates of return yield a Shariah-compliant expected return rather than interest, as with standard accounts. Since the Bank was founded in 2004, it has always paid at least the percentage of profit it quotes to its clients.

How about committing your savings instead?

While Al Rayan’s easily accessible deal is a best buy, savers can do better if they’re willing to commit their money for six months or more – lose access in the meantime.

The best one-year deal pays more than 1 percentage point more than Al Rayan’s deal. Charter Savings Bank currently pays 2.83 percent.

However, studious savers will be aware that the Bank of England may raise the base rate again on Thursday, with some suggesting it could rise from 1.25 percent to 1.75 percent.

Savers who are bracing for better deals ahead may want to refrain from pinning their money for any length of time.

An easily accessible deal can therefore be a great way to stay responsive and move cash to another account as and when better deals come along.

However, for savers who choose between the convenience of an easily accessible account and better returns from fixed-rate offerings, they may choose an option in the middle.

Investec has launched a market-leading savings account with a 90-day notice, paying 2.1 percent on balances between £5,000 and £250,000. Saver deposits are protected up to £85,000 per person under the FSCS.

A cancellation account is an intermediate between a low-threshold account and an account with a fixed interest rate. They allow savers to withdraw their money after a notice period, usually between 30 and 120 days, but can offer savers better returns than they would otherwise get with an easily accessible account.

The Investec 90 days notice periodwhich can be opened online, offers the highest interest rate of all currently available cancellation savings accounts and pays interest monthly.

It also offers unlimited deposits and withdrawals, albeit with 90 days’ notice.

THIS IS MONEY FIVE OF THE BEST CURRENT BILLS

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