You are here: Home - Saving & Banking - News -

Act now: Atom Bank to cut market-leading savings rates tonight

Written by: Paloma Kubiak
Savers looking to get the best rates will need to act fast as Atom Bank is cutting several market-leading deals from midnight tonight.

The app-based bank confirmed it is reducing the rates on its current best buy fixed rate deals due to high customer demand.

Here’s what’s changing from midnight:

  • One-year fixed saver: from 1.8% to 1.6%
  • Two-year fixed saver: 2.1% to 1.7%
  • Three-year fixed saver: 2.2% to 1.9%
  • Five-year fixed saver: 2.4% to 2.25%.

Is Atom still a best buy?

Atom said it is “still offering competitive rates”, however, the cuts mean it will no longer lead all the best buy tables.

Once Atom’s one-year rate drops to 1.6%, it will fall to third place behind United Trust Bank’s 1.65% offering and OakNorth Bank’s 1.62% rate.

The 1.7% rate offered on Atom’s two-year fixed saver will also put it second place behind United Trust Bank’s 1.80%.

However, the three-year saver at 1.9% will put it on equal footing with Agri Bank, though the latter has a minimum £5,000 investment hurdle and it doesn’t come under the UK’s Financial Services Compensation Scheme (FSCS). Instead, the first €100,000 (or sterling equivalent) per person, per banking licence, is protected by Malta Depositor Compensation Scheme. For savers with a more modest £1,000, Vanquis Bank pays 1.85% on its three-year bond.

The 2.25% offering on Atom’s five-year fixed saver matches Secure Trust Bank, but Milestone Savings which operates under Islamic finance principles, offers an expected rate of 2.30%, just pipping Atom’s offering, though it has a high £10,000 minimum savings amount.

What does Atom say?

An Atom spokesperson, said: “We’ve given UK savers a great deal over recent weeks and with strong support from the press, we’ve seen a high volume of new customers come and join us.

“We are however a start-up business and a responsible bank, so we need to control the flow of money in and out of the business.  We make money by bringing in savings and lending it back out to SME and residential mortgage customers.

“Because we’ve had lots of savings customers join us over the past few weeks, we’re now reducing our rates for a while to ensure we’re taking a balanced approach to managing our business.  As a new digital player, you’d expect Atom to be designed to increase and decrease rates quickly to meet the demands of its business, so don’t expect us to conform to market norms.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
lifelong income
How to give your pension a bumper injection

Rules allowing savers to contribute more to their pension than normal are set to become less generous this year.