Al Rayan Bank boosts four fixed savings accounts with rates up to competitive 5.83% | Personal Finance | Finance

Al Rayan Bank has increased the expected profit rate (EPR) across its Fixed Term Deposit range, boosting returns on four savings accounts.

Savers looking to put money away for one year up to 36 months can expect new rates ranging from 5.49 percent up to 5.83 percent.

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

Profit rates are expected, however, the bank said it has always paid at least the profit rate it has quoted to its customers since it was founded in 2004.

Fixed-rate savings accounts typically add another layer of certainty to saving, as it means customers can lock in the rate offered at the time of opening without having to worry about it dropping.

The competitive EPR boost will see the following changes applied across Al Rayan Bank’s FTD products:

• 12 months: When reinvested into the lump sum the EPR is 5.95 percent. When paid to a nominated account the EPR is 5.83 percent
• 18 months: When reinvested into the lump sum the EPR is 5.65 percent. When paid to a nominated account the EPR is 5.54 percent
• 24 months: When reinvested into the lump sum the EPR is 5.7 percent. When paid to a nominated account the EPR is 5.59 percent
• 36 months: When reinvested into the lump sum the EPR is 5.6 percent. When paid to a nominated account the EPR is 5.49 percent.

The accounts require a minimum deposit of £5,000 and no withdrawals can be made until the end of the term.

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

Savers can open an account through Al Rayan Bank’s Digital Banking app, online, or by telephone. Applicants must also be over the age of 16.

Al Rayan Bank is a member of the Financial Services Compensation Scheme (FSCS), which protects up to £85,000 worth of eligible depositors’ savings.

As an independent UK bank, Al Rayan Bank is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and the PRA.

Commenting on the savings market, Alice Haine, Personal Finance Analyst at investment platform Bestinvest said: “The gap between the top savings rates and CPI inflation is narrowing which means people’s savings are being eroded far less quickly.

“Savers locking in a high fixed rate now should see their pot gain in value in real terms if inflation continues its easing path in the months ahead.”

However, she noted: “Not all savings accounts are equal so don’t assume your lender has applied the best rate they can to your existing savings account.

“Savers would be wise to continue shopping around for the best deals on the market to find the most competitive rate they can – particularly as the best savings rates are often found at smaller, challenger banks and newer online operators.”