High street favourites eclipsed by UK challenger banks on rates
1 and 2 Year fixed-term savings rates from challengers over 1%higher than high street on average
Challengers beat high street instant access accounts by 0.85% on average
Research by Gatehouse Bank highlights the gulf between challengers and established players
London, 12 March 2018 – Challenger banks are eclipsing the High Street’s big names with savings rates more than 1% higher on average, new research by UK challenger bank, Gatehouse Bank, revealed today.
The average 1 Year fixed-term deposit account offered by UK challenger banks pays an eye-opening 1.18% more than the equivalent on the high street - 1.82% compared to 0.63%*.
Likewise, the average 2 Year fixed-term deposit account across the challenger bank community pays a whopping 1.29% more than the high street - 2.05% compared to the significantly lower 0.76% paid by established banking players.
And for people who like to be able to get at their savings immediately, the average instant access account rate among the challengers is 0.85% more than on the high street - 1.23% compared to just 0.39%.
The table below reveals the low returns offered by the UK’s high street banks when it comes to everyday savings products.
Charles Haresnape, CEO, Gatehouse Bank, commented:
“If proof were needed that, even in a low interest rate environment, it’s worth shopping around, then it’s the dramatic difference in the rates paid to the nation’s savers by challengers compared with larger banks.
“Sadly too many savers still opt for products from household names as they are unaware of the best buys that exist beyond the high street. What they also often overlook is the fact that deposits in UK challenger banks are protected by the FSCS in exactly the same way as with a high street bank.”
As a Shariah-compliant UK bank, Gatehouse Bank’s own Milestone Savings products - protected by the Financial Services Compensation Scheme (FSCS) - are ethical by default and offers an alternative to interest called the Expected Profit Rate (EPR).
The accounts’ returns are generated by the bank’s profit-generating Shariah-compliant assets, with some of the profit the bank earns from these activities returned to customers, allowing them to grow their savings without earning interest.
*Source: Challenger bank AER rates were identified through Moneyfacts’ marketwide survey and were correct as of 08/03/2018; Corresponding High Street bank AER rates were identified directly on the banks’ websites and were correct as of 08/03/2018.