Gatehouse Bank has raised rates on three of its savings accounts to take aim at the best buy tables, with one now offering more than inflation.
The bank’s most popular account, a one-year fixed term deposit (FTD) account, will now offer a 2.15 per cent expected profit rate. The UK’s current inflation rate is 2.1 per cent.
The Sharia-compliant bank does not apply interest to its deposit accounts and all savings are managed ethically, which means avoiding sectors such as alcohol, tobacco, gambling, adult entertainment, and arms deals.
Charles Haresnape, chief executive officer, Gatehouse Bank, said: "People continue to struggle to find inflation-beating savings accounts and our simple message to savers remains the same — shop around and be prepared to consider less-known providers, many of whom offer significantly better returns."
Gatehouse is also raising rates on its two-year FTD account from 2.14 per cent to 2.35 per cent and its three-year FTD account from 2.33 per cent to 2.45 per cent.
In a statement the bank said it expected both products to feature in best buy tables.
Scott Gallacher, chartered financial planner at Rowley Turton Private Wealth Management, said while not a mainstream name, Gatehouse was offering competitive rates with full Financial Services Compensation Scheme depositor’s protection of up to £85,000 per person.
Mr Gallacher added: "Savers should be aware that withdrawals aren’t normally allowed during the fixed term and, as this is a Sharia product the rates aren’t guaranteed as such, although Gatehouse state they have ‘always managed to pay its customers the expected profit rate’.
"If Gatehouse believe the expected rate will not be achieved, they will contact you giving you the option to close your account immediately with your original deposit returned, along with profit earned to date."
All Gatehouse Bank savings accounts require an initial deposit of £1,000.
