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Challenger bank unveils market leading savings rates

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20/02/2017
Challenger bank Charter Savings has increased rates on four of its fixed rate bonds and launched two new market-leading products.

It now pays 1.60% on its 1 year bond, up from 1.38%. While a significant improvement, the new rate is still lower than inflation, which is currently 1.8%.

The rate on its 2-year bond is now 1.75%, up from 1.51%, while the 3-year pays 1.85% up from 1.66% and the 5 year pays 2.16% up from 2.01%.

New options for savers include an 18-month bond paying 1.65% and a 4-year bond paying 2.06%.

Paul Whitlock, director of savings, said: “Savers need to act quickly to lock-in returns as our best buy rates are already proving very popular.”

Challenger banks have been bucking the trend by increasing cash savings rates in the past couple of months.

RCI Bank upped rates three times in January, while Atom Bank, OakNorth Bank and Vanquis Bank also increased rates.

Tom Adams, head of research at independent savings adviser Savings Champion, said: “Charter Savings Bank is now the clear market leader for 1 year, 18 months, 2 years, 3 years and 4 years, beating the competition by a significant margin of up to 0.15%. The 5 year bond is second only to Secure Trust Bank (2.20%) and not far off the top. All of the bonds have a monthly income option for those that prefer it, which could be ideal for those who use their savings to boost their income.

“Whilst we have seen a number of providers putting rates up this year, this is a significant jump compared to the smaller adjustments we have seen thus far and Charter Savings Bank should be commended for that. Hopefully, we will see providers reacting to Charter’s challenge, pushing rates up even further and giving savers fresh hope for better rates in the future.”

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