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.