Gatehouse Bank launches new best buy savings rate of 2%

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Gatehouse Bank launches new best buy savings rate of 2%

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Al-Rayan Bank has upped the rate on its easy-access savings account from 1.9 per cent to 2.1 per cent hours after a challenger leapfrogged it.

Gatehouse Bank launched an easy-access savings account with a 2 per cent rate as deals continue to improve off the back of Bank of England rate rises. 

Al Rayan followed in quick succession increasing its rate, taking it back to the top of  our independent This is Money best buy table indicating just how quickly the savings market is changing.

Access to the Al Rayan Everyday Saver Issue 3 account requires a £5,000 deposit, while Gatehouse can be opened with £1.

Gatehouse's offer is expected to push other providers to raise the rates they offer to savers as interest rates continue to rise.

Gatehouse's offer is expected to push other providers to raise the rates they offer to savers as interest rates continue to rise.

Gatehouse’s offer is expected to push other providers to raise the rates they offer to savers as interest rates continue to rise. 

On £10,000, those in Al-Rayan would expect a return of £210, while in Gatehouse it would be £200, after a year, provided the rate stayed the same. 

It is the first time an easy-access has offered 2 per cent for around a decade.

Both accounts can be opened online and deposits are protected up to £85,000 per individual under the Financial Services Compensation Scheme, or £170,000 for couples.

Despite the rises, this Al-Rayan rate is still some 8 percentage points under the Consumer Prices Index measure of inflation, with no accounts coming close to matching this.

James Blower, founder of The Savings Guru, said at the time of Gatehouse moving to the top of the best buys:’ It’s a bold move from Gatehouse to go so far clear at the top but is likely to spark others to move too now. 

‘Al-Rayan have been the leader for several weeks but providers have been closing the gap behind them so it was only a matter of time before someone moved above them.’ 

He adds: ‘With the base rate expected to go up again on 15 September, it’s likely we will see other providers moving upwards in anticipation of this happening. 

‘It’s great news for savers that rates are finally going up. Gatehouse are still a relatively small bank so it’s unlikely this rate will be available for more than a week or two, unless other providers react, because they won’t be able to take a large inflow on it.’

Savers using the Gatehouse account can choose to have the profit on their sum paid monthly or annually into either the easy-access savings account, or another nominated account in their name.

Both banks’ notes says the profit rate on the account is variable and can be changed once customers have been given notice.

An easy-access account allows savers to withdraw part of all of their funds at any time, or increase their deposit at any time by at least £1.

Because of the flexibility they offer lower rates compared to a notice account which often prohibit funs being removed from the account less than a year after opening.

To apply for an account you must be at least 18 years old, a UK resident (or resident in the UK for tax purposes). 

Once opened, the account can be managed online 24/7 or using Gatehouse’s savings app.

Savers can beat the Gatehouse rate with savings platform, Raisin. It is currently offering a way for savers to bag a 2.06 per cent return – which is now beaten by Al-Rayan.

Raisin* is currently offering a £30 welcome bonus to This is Money readers, but they must open a new Raisin account via this link* or any link originating from our website.

It offers savers the chance to boost their savings by £30 when they open and fund an account on its marketplace with a minimum of £10,000.

Its best paying easy-access deal is offered by its partner bank, UBL, and pays 1.76 per cent.

For a saver opening their first Raisin account and depositing £10,000 into this deal, that could result in an effective 2.06 per cent return (£206 after one year).

Meanwhile, savers can bag a top 3.5 per cent over 12 months with Raisin and its exclusive deal with Ahli United Bank – this can be boosted to 3.8 per cent with the link*.

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