Would you trust Harrods with your savings?
It’s among the unfamiliar names battling for your cash as big banks cut rates. So . . .
JUST when you thought it could not get any worse for savers, NS&I cuts its rates again.
Last week, the Government’s savings arm said rates would fall by between 0.1 and 0.25 percentage points on accounts including Premium Bonds.
Big banks have also slashed their rates since official interest rates fell to 0.25 pc last August.
The good news is that unfamiliar banks have started battling for top spot in Money Mail’s independent best buy tables (see page 50 or thisismoney. co.uk/savingsrates).
Some are new; others are only now looking for your cash and the competition should intensify with dozens more banks preparing to launch this year.
Here, we run the rule over the new names offering best buys.
MASTHAVEN masthaven.co.uk, 0330 363 6666
MASTHAVEN Bank launched its first savings accounts only three months ago. It is based in Soho, London, and offers online, fixed-rate bonds.
These include 1.25 pc for one year, 1.53 pc for two years (the second best available, after Atom Bank — see below) and 1.76 pc for three.
or, you can choose your own term and get a tailored rate. For example, if you want your bond to mature on March 28, 2019, your rate is 1.6 pc.
Unlike other banks owned by shareholders, it works like a partnership. At launch, four out of five employees were shareholders.
It is run by founder Andrew Bloom, 41, a chartered accountant formerly with KPMG who is experienced in lending on property. Managing director, Jon Hall, 48, was chief executive of Saffron BS before joining Masthaven just over two years ago.
Your money provides mortgages and bridging loans (used when there is a gap between buying a new home and selling the old one) in the UK, and loans to small and medium-sized housebuilders.
The UK Financial Services Compensation Scheme (FSCS) covers your money — up to £85,000, or £170,000 on joint accounts — if a bank goes bust.
OAKNORTH oaknorth.com 0330 380 1181
BASED in Mayfair, London, oakNorth launched its first savings accounts in 2015.
Its easy-access account pays 0.75 pc, while its one-year bond pays 1.25 pc and its two-year 1.56 pc. The bank also offers 15- and 30-month bonds at 1.29 pc and 1.6 pc respectively. Interest is added at the end of the term, not annually.
oakNorth was founded by Rishi Khosla, 41, the current chief executive, and Joel Perlman, 42.
They built their previous business, Copal Amba, which provides analysis to companies to improve their profits, into a global brand employing 3,000, and then sold it to ratings agency Moody’s in 2014.
Your money is lent to UK entrepreneurs and mid- sized companies looking for capital to expand their businesses and it is covered by the FSCS.
ATOM BANK atombank.co.uk 0333 399 0050
THIS is the first bank to offer savings accounts which you run exclusively through an app.
Its one-year bond pays a top 1.5 pc and its two-year deal is the best-paying at 1.65 pc. It plans to offer an easy-access account, a current account, debit cards and overdrafts this year.
The Durham-based bank was set up with £135 million from investors. It is run by Mark Mullen, former boss of internet and phone bank First Direct, and chairman Anthony Thomson, who held the same post at Metro Bank. Your money is lent to small UK businesses and as home mortgages. It is covered by the FSCS.
AL RAYAN alrayanbank.co.uk 0808 278 7146
THE Sharia-compliant bank, with its head office in Knightsbridge, west London, offers accounts online and through its 13 branches. Islamic banks operate without interest, so offer an ‘expected profit rate’ instead.
Your money is lent as Shariacompliant mortgages and commercial property, and is covered by the FSCS.
Profit rates (taxed in the same way as savings interest) include 1.3 pc for one-year or 1.4 pc for 18 months. It has a one-year cash Isa at 1.09 pc.
Set up as the Islamic Bank of Britain plc in 2004, it changed its name ten years later when it became part of Qatar- based Masraf Al Rayan.
It is run by Sultan Choudhury, 44, who joined in 2004 after working at Charles Schwab Europe, Barclays Private Bank and accountants Deloitte.
HARRODS harrodsbank.co.uk 0800 387704
NoT a new bank as such (it has been around for 120 years) but it has recently offered top fixedbond deals.
Based in the store, the bank has the same ethos of high customer service and quality for which the store had become renowned. Its one-year bond pays 1.05 pc.
It is an independent private bank, run by chief executive Mark Stephens, 57, who joined last year from Aldermore, where he was deputy chief executive and commercial director.
Your money is lent as residential and buy- to- let mortgages in England and wales.
It also has an 18-month bond deal at 1.4 pc or two years at 1.5 pc, available from its branch in the shop or by post. The minimum investment is £20,000 and your money is covered by the FSCS.
HAMPSHIRE TRUST htb.co.uk 020 7862 6222
oNE of the few new banks to offer postal and online accounts, Hampshire has grown rapidly and this week moved in to larger offices in the City of London.
originally formed in 1977 as Hampshire Trust in Fareham, it acquired new management and became a bank in May 2014. The management buyout was backed by private equity firm Alchemy Special opportunities Fund II LP, which has since invested additional capital.
It is run by Mark SismeyDurrant, whose career in banking stretches back more than 35 years to a graduate job at Midland Bank. He has spent more than 25 years since then at board level.
The bank loans your money for hire purchase and leasing finance to businesses and individuals and property for businesses and it is covered by the FSCS.
Fixed rate bonds include a one-year deal at 0.95 pc, 1.2 pc for two years and 1.3 pc for three. Its 90-day notice account pays 0.9 pc.