Can you trust the small banks with top rates?

SAVERS are flocking to new banks that offer better deals than the big banks.

Your money is safe with these small fry as it is also covered by the UK Financial Services Compensation Scheme (FSCS). This gives up to £85,000, or £170,000 on joint accounts, if a bank goes bust.

Here, we examine the latest new names.

Atom Bank ( atombank.co.uk) has attracted £1.3 billion from savers since its launch 18 months ago. You run its fixed- rate savings accounts through an app on your phone or tablet. The Durham-based privately-owned bank has attracted £400 million from investors. It is run by Mark Mullen, ex-boss of internet and phone bank First Direct.

Your money is lent to small businesses in the UK and as mortgages.

It currently offers 1.8 pc for one year, 2 pc for two years and 2.15 pc for three years.

Online bank Ford Money ( ford money.co.uk) launched a year ago and is part of the car giant Ford group. Its big attraction is competitive rates and its promise never to pay less to its loyal savers in variable rate accounts than it does to attract new ones.

Based in Essex, its chief deposit officer is Suzanne Lewsley, who was with National

Savings & Investments and Post Office Money.

Ford Money’s easy- access account pays 1.22 pc, while you can earn 1.7 pc fixed for one year, or 1.85 pc for two. Its easy-access cash Isa pays 1.11 pc, or 1.45 pc fixed for one year and 1.65 pc for two.

PCF Bank ( pcfbank. co. uk) launched its first accounts last July and has already taken in an above- target £100 million with an average balance of £45,000. The Londonbased bank’s chief executive is accountant Scott Maybury. It lends to individuals and UK businesses wanting to buy vehicles.

It pays 1.9 pc for 18 months, 2.1 pc for two years, 2.15 pc for 30 months and 2.3 pc for three years. Unusually for a new bank, you can open and operate an account through the post, as well as online. Tandem Bank launched its first savings accounts this month which you open through its website ( tandem.co.uk) and then run through its app.

The London-based bank, which took over Harrods Bank earlier this year, is run by entrepreneur Ricky Knox.

It has 50,000 customers using its savings accounts, credit cards and app to manage their current accounts. Its fixed-rate bonds pay a near-top 1.8 pc for one year, 2.1 pc for two years and 2.3 pc for three years. An easy- access account is in the pipeline. Online bank Wyelands Bank ( wyelandsbank. co. uk) celebrated its first birthday last December. By then it had £ 600 million from 15,000 savers attracting an average £ 30 million a month. Established by British industrial entrepreneur Sanjeev Gupta, and run by chief executive Iain Hunter, it was known as Tungsten Bank and is part of the GFG Alliance, the global energy, metals, industrials and financial services group. It offers fixed-rate bonds, and last week raised rates to a top 1.85 pc for one year, or 2.15 pc for two years. Money is lent to small and medium-size UK businesses.