Competition among the challenger banks is heating up, and this week has seen a battle break out to offer the most attractive fixed-rate bonds.
Yesterday Atom Bank pushed up its one-year fix to 2.05 per cent, stealing the top spot from Gatehouse Bank just a week after it pushed through the pack to a year-long high of 2 per cent.
But the Sharia compliant bank has hit back, bumping up more of its fixed-term bond range handing savers two new market-beating deals of up to 2.68 per cent.
Battling it out: Atom Bank and Gatehouse Bank have gone head to head for best buy status
It’s not the only challenger to sharpen its rates in response. Al Rayan, Sainsbury’s Bank and Charter Savings Bank have all made moves this week to make rates slightly more attractive.
The top of This is Money’s Best Buy savings tables is a revolving door, with rates that are inching up at least.
Banks aim for the top spot in the market, typically boosting rates just a nudge above existing deals to get there, in order to draw customers away from rivals.
And as soon as they fill their coffers, the rates usually drop again meaning savers have to act fast to open these marginally better deals in time.
Unfortunately this means rates tend to crawl up, with such tiny improvements.
But with little or no interest from the big banks in savers’ cash, competition from these smaller banks is the only thing pushing interest in the right direction.
So what has it meant for rates this week?
As mentioned above, the likes of Sainsbury’s Bank, Masthaven, Al Rayan and Charter Savings Bank have all improved their fixed term savings accounts with competitive new rates.
You can find out how they compare using our independently complied tables here.
But the most notable deals from this week’s savings race come from Gatehouse Bank. Two of it’s new deals bring savers market-beating rates.
How to get £50 cashback on savings
Savings marketplace, Raisin, is currently handing out £50 in cash if you open the Gatehouse Bank one-year fixed term deposit account through its site.
To get the cash you need to open the account here and fund it as normal.
To get the money paid into your account you need to send an email from the same address you registered with, including your name with the subject ‘Launch bonus’ within 30 days of your deposit.
You ca find out more about the promotion here.
Gatehouse Bank offers an expected profit rate rather than guaranteed interest as it is compliant with Sharia law.
This prohibits it from making money from money, which rules out paying interest.
The provider, which recently rebranded from Milestone Savings, also boosted the rate on its two-year account, paying 2.14 per cent.
This is still beaten by Atom Bank however which pays 2.15 per cent over the same term (or 2.13 per cent for monthly income).
As mentioned above Atom Bank holds poll position with a one-year fixed rate of 2.05 per cent, followed by Gatehouse Bank at 2 per cent.
THIS IS MONEY’S FIVE OF THE BEST SAVINGS DEALS
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