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

New best buy 1-year bond pays 2%

0
Written by:
21/05/2018
Gatehouse Bank has raised the rate on its 1-year fixed-term deposit (FTD) account to 2%, pushing it to the top of the best buy tables.

The challenger is a UK Sharia-compliant bank, meaning it pays an expected or anticipated rate. The account requires a minimum initial deposit of £1,000.

The new rate from Gatehouse Bank is table-topping. In fact, it pays the same as a 5-year fixed cash ISA from Skipton Building Society. But it does not match inflation, which currently stands at 2.5%.

To beat inflation, savers need to lock their money away for at least five years. The best 5-year fixed bond deal comes from Vanquis Bank, paying 2.7% with a minimum deposit of £1,000.

United Bank London pays 2.65% on its 5-year deal and the minimum opening amount is £2,000.

Another option is a high interest current account.

  • Nationwide FlexDirect pays 5% on balances up to £2,500, with a minimum deposit of £1,000 a month required.
  • TSB Classic Plus pays 5% on balances up to £1,500 and requires £500 to be deposited a month.
  • Tesco Bank offers 3% on balances up to £3,000 but requires a minimum monthly deposit of £750, plus three direct debits from the account.
  • Nationwide FlexPlus pays 3% on the first £2,500 and has no minimum deposit requirements but charges a monthly fee of £13.

Sharia accounts: what you need to know

Sharia accounts have taken some of the highest positions in the best buy tables over the last few years. They are a way for the millions of UK Muslims to save without breaking Sharia law, but they are not restricted to Muslims.

The rate advertised is an expected profit rate (EPR), so the return cannot be guaranteed. In the case of the Gatehouse product, the bank states it has never failed to pay an EPR.

Rachel Springall, finance expert at Moneyfacts, said: “So long as customers are happy with the terms and conditions, these accounts could be a great alternative to the more familiar brands, and the ethical stance could draw in savers looking for something different.”

For more on Sharia savings accounts, click here.

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

Read previous post:
Stock of the week: Mondi

Ian Forrest, investment research analyst at The Share Centre, picks Mondi as stock of the week.

Close