Masthaven, which has focused on specialist lending since 2004, has branched out into the savings market after receiving its retail banking licence in April this year.

It will offer online fixed interest savings accounts, in addition to its range of mortgage products through intermediaries.

Masthaven said it is offering an alternative to the “one-size-fits-all” approach of conventional banks by focusing on customer needs that aren’t currently being met by traditional lenders.

Its Flexible Term Saver account allows customers to determine when their savings account matures to the day – anytime between six months and five years, working around their own lifestyle.

The challenger bank said the product has been specially designed for customers who may be saving for key events, such as a holiday, wedding or university fees, and the rate it offers is based on those offered on its fixed-rate products.

For example, a £10,000 deposit earning monthly interest for a 20-month period (28 July 2018 maturity date) offers a 1.46% interest rate.

However, the more traditional saver can opt for Masthaven’s standard fixed-term products:

• One-year fixed term bond: 1.35% AER
• Two-year fixed term bond: 1.53% AER
• Three-year fixed term bond: 1.61% AER
• Five-year fixed term bond: 2.01% AER

Customers can deposit between £500 and £250,000. As the products are fixed, you won’t be able to access your money before the maturity date of the bond.

Masthaven confirms all savings deposits are protected under the Financial Services Compensation Scheme (FSCS) of up to £75,000.

How do the savings products compare?

According to Moneyfacts, the current best one-year fixed rate bond is from Atom Bank, paying 1.40% AER (£50 min) beating the offering from Masthaven.

Atom Bank’s two-year bond also beats Masthaven – paying 1.60% AER (£50 min), above the 1.53% AER offered by the challenger.

However, via Masthaven’s Flexible Term Saver, opting for an 18-month bond could be a good move as it offers 1.44% AER, coming ahead of the next best – Al Rayan’s 1.41% AER (£1,000 min) expected profit rate.

In terms of the three-year bond, Ikano Bank pays 1.63% AER (£1,000 min), slightly more than Masthaven’s 1.61% AER. However, an important point to note is that savings are protected by the Swedish Deposit Guarantee Scheme, rather than under the UK’s FSCS. See YourMoney.com’s Should I entrust foreign banks with my savings? for more information.

Masthaven’s five-year bond leads the best buy table offering 2.01% AER, above the next best at 2.00% AER.