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