Al Rayan Bank boosts fixed savings account to competitive 4.95 percent | Personal Finance | Finance
Fixed savers help add another layer of certainty to saving, as these accounts lock in the interest rate offered at the time of opening.
Al Rayan Bank is now offering a more competitive Expected Profit Rate (EPR) of 4.95 percent on its 12-month Fixed Rate Deposit account, and savers will need a minimum deposit of £5,000 to invest.
Instead of paying interest to savers, Al Rayan Bank invests customers’ deposits in ethical, Sharia-compliant activities to generate a profit.
Profit rates are expected, but according to Al Rayan Bank, it has always paid at least the profit rate it has quoted to its customers since it was founded in 2004.
However, customers should be comfortable depositing their cash without touching it for the 12-month term as no withdrawals are permitted until maturity.
Profit is calculated monthly and can either be paid quarterly to a nominated account, or reinvested into the lump sum and paid upon maturity.
When paid to a nominated account, the EPR drops slightly to 4.87 percent, but when reinvested into the lump sum, the EPR is 4.95 percent.
The account can be opened through Al Rayan Bank’s Digital Banking app, online or by phone, and applicants must be over the age of 16.
The Bank is also a member of the Financial Services Compensation Scheme, which guarantees eligible depositors’ savings up to £85,000.
But while Al Rayan Bank is offering a particularly attractive rate, it isn’t quite topping the leaderboard of one-year fixes. Allica Bank is currently taking the lead with a five percent Annual Equivalent Rate (AER) on its 12-Month Fixed Term Savings Account (Issue 40).
People can open the account with a minimum deposit of £10,000 and interest is calculated daily and paid at maturity.
Savers must be a UK resident aged 18 years old or over and withdrawals are not permitted throughout the account term.
For those who have a smaller deposit to invest, OakNorth Bank’s Fixed Term Savings Account offers an AER of 4.92 percent and can be opened with just £1.
Interest is calculated daily and applied to the balance at maturity, and up to £500,000 can be invested in the account overall.
Withdrawals are not permitted throughout the term unless at the bank’s discretion. Savers must be UK residents aged over 18 to open the account.
SmartSave is also offering an AER of 4.92 percent on its One Year Fixed Rate Saver. Interest is calculated daily and paid at maturity, and savers need a slightly bigger deposit of £10,000 to open the account.
Withdrawals from this account also cannot be made, unless in “exceptional circumstances”.
