AgriBank will target savers but only lend to UK farmers and agribusinesses.

The bank’s main offerings will be three year, four year and five year fixed term deposits which currently pay 3.35%, 3.5% and 3.6% respectively.

Frank Sekula, AgriBank founder, said: “We plan to operate a traditional banking model by taking deposits and lending them to farmers whom we know will pay them back. Our aim is to offer savers more competitive rates than are currently offered by banks by focussing solely on the sector that we know best and being very efficient at delivering our services.”

AgriBank’s savings products will be distributed largely via online intermediaries. A minimum deposit to open an account with AgriBank is £10,000.

Kevin Mountford, head of banking at Moneysupermarket.com, commented: “It is good to see another option for hard pressed savers. Anyone investing in AgriBank needs to decide if the great rate is enough to offset the fact that there is no deposit compensation cover, however, as the bank invests in the UK agricultural sector, the risk seems relatively low.”

AgriBank holds an EU banking licence issued by the Malta Financial Services Authority (MFSA) and has been approved to offer banking services in the UK by the FSA but its savings products are not covered by a deposit compensation scheme.