Bank gives savers a boost with 5.36 percent fixed savings account

As living costs remain high and disposable income dwindles, Britons have been searching for savings accounts that make their money work the hardest.

As the choice for competitive fixed savers grows, Al Rayan Bank is offering an Expected Profit Rate (EPR) of 5.36 percent on its 12-month Fixed Rate Deposit account, and savers will need a minimum deposit of £5,000 to invest.

Fixed savings accounts enable people to lock in the interest rate offered at the time of opening, adding a layer of certainty – and they also typically offer some of the highest rates on the market.

However, they do come with additional restrictions, such as stricter withdrawal rules, meaning people should be comfortable investing their money without touching it for the duration of the fixed term.

Instead of paying interest to savers, Al Rayan Bank invests customers’ deposits in ethical, Sharia-compliant activities to generate a profit.

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While profit rates are expected, Al Rayan Bank has said it has always paid at least the profit rate it has quoted to its customers since it was founded in 2004.

Profit is calculated monthly and can either be paid quarterly to a nominated account, or reinvested into the lump sum and paid upon maturity.

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. Withdrawals are, however, not permitted throughout the term.

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 topping the table. OakNorth Bank’s Fixed Term Savings Account is currently taking the lead with a 5.42 percent Annual Equivalent Rate (AER).

The account can be opened with a minimum deposit of £1 and up to £500,000 can be invested overall. Interest is calculated daily and paid on maturity, and withdrawals are also not permitted throughout the term.

SmartSave, which is owned by British Bank Chetwood Financial, falls just behind with an AER of 5.41 percent on its One Year Fixed Rate Saver.

Savers can open the SmartSave Fixed Saver with a minimum deposit of £10,000 and interest accrues daily and is applied to the balance at maturity.

All deposits up to £85,000 with SmartSave are protected by the Financial Services Compensation Scheme (FSCS), and withdrawals are not permitted unless in exceptional circumstances at the discretion of the savings provider.