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

Al Rayan Bank unveils four table-topping savings rates

Written by:
Islamic bank Al Rayan has hiked the rates on its four fixed-term savings products, propelling them all to the top of Moneyfacts' independent best buy tables.    

The challenger bank has increased the rate on its one-year bond to 2.12%. Its nearest competitor is Gatehouse Bank, which pays 2.10%.

It has also boosted its 18-month rate to 2.32%, and its two and three-year bonds to 2.42% and 2.52% respectively.

Al Rayan is a sharia-compliant bank, so customers are not paid interest but instead are given an expected profit rate (EPR). The bank has never failed to pay out its EPR.

Rachel Springall, finance expert at rate monitoring site Moneyfacts, said: “Al Rayan Bank are flying high in the Best Buys, so savers searching for a fixed return on their cash will be pleasantly surprised by these latest rates.

“In January 2018, Al Rayan Bank paid an expected profit rate of 1.85% [on its one-year account] and sat at the top of the market, and today’s deal pays a notable 0.37% more.”

To open an account, savers need to deposit at least £1,000. Interest is paid quarterly and can be taken as income or reinvested.

Savings are covered by the Financial Services Compensation Scheme (FSCS), which means if the bank goes bust you’d get up to £85,000 back or £170,000 for joint accounts. (For more, read our guide on sharia savings accounts).

What is a sharia-compliant bank?

Instead of paying interest to savers, Islamic banks, such as Al Rayan, invest customers’ deposits in ethical, sharia-compliant trading activities to generate a profit, which is then shared between the customer and the Bank.

Islamic banks are open to savers of all faiths and none.

Al Rayan estimates over 90% of its fixed-term deposit customers are non-Muslim.

Springall said: “Savers will likely be thinking of other ways to make their money work for them, and investing ethically could be on their minds. Islamic banks are very different to your typical high-street bank, and so long as they are protected by the FSCS, there is little reason for savers to overlook them.

“It’s important for the Islamic banks to continue to build up trust among consumers who may be hesitant to invest with an unfamiliar brand.”


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.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

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.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

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...

Money Tips of the Week

  • RT @YourMoneyUK: Government plans cut to minimum shared ownership stake
  • RT @WeareJust_PR: “Families tend not to talk about money and death. But if we don’t talk about these themes it becomes very hard to make pr…
  • RT @RoyalLondon: Voluntary NI contributions to state pensions have risen - @stevewebb1 hails this as “great news that the message is gettin…

Read previous post:
funeral plans
Less than one in five shop around for funeral costs

Consumers are used to shopping around for insurance and utilities, but only one-fifth shop around for their funeral costs in...