Savings rates have been on the rocks in the last year and a half due to the uncertainty of the pandemic, an event which has created unprecedented challenges in all spheres. With the Bank of England’s decision to lower its base rate to 0.1 percent in March 2020, which it has not raised since, many providers have been impacted in a similar way. This has created immense difficulties for those looking for an account through which to increase their funds. However, interest rates are taking a turn for the better recently, albeit in a gradual way, and more opportunities are opening up for savers. This is why the latest news from perhaps a less familiar bank could be heartening for Britons.
Atom Bank, which describes itself as the UK’s first app-based bank, has today increased rates for its award-winning fixed rate saver products, with its one year fix currently offering a “market-busting” 1.50 percent.
Many other products which are offered by the bank are also taking market-leading positions in the current climate, meaning optimism is being injected into the savings industry once again.
While challenger banks may be less familiar with Britons, Atom is now offering far higher rates than those currently available through many traditional high street banks, which could mean the competition amongst these providers to draw in savers is hotting up. Indeed, Atom has said its latest move is an effort to “drive value” back into the savings market.
Fixed rate savers, of course, differ to easy access, and it may be an adjustment to get used to for those who are willing to switch. Many people will have to be comfortable with parting with their money for the set period of time, but can often benefit from stronger interest rates for doing so.
Overall, though, Britons are generally advised not to enter into a fixed rate deal with all of their money. Usually, experts state individuals should have three to six months worth of expenses in an easy access account, as this can be useful should any unexpected emergencies arise where a person needs to get their hands on cash quickly.
But the fixed rate option could still be well suited to a whole host of individuals, and the options which are available through Atom Bank continue to be persuasive given the current climate for savings accounts within the UK.
Atom Bank have provided savers with an insight into the new rates it is offering across a whole host of different products which will suit a myriad of individuals and their financial needs.
Firstly, the six month fixed saver has an interest rate of 0.75 percent, pipped to the post by the one year fixed save with an interest rate of 1.50 percent – favourable amongst similar options. The two year fixed saver rounds out the more short-term options with an interest rate of 1.75 percent.
Those who are happy to fix for longer may be comfortable with the three year fixed saver which has an interest rate of 1.75 percent, and finally, those who wish to lock in their cash for a period of five years could benefit from an interest rate of 1.86 percent.
Edward Twiddy, Chief Customer Officer at Atom Bank, commented on the latest set of interest rates which are currently available to Britons, and said: “Low interest rates throughout the pandemic have meant savers have had an especially tough time, but the rate changes we’ve unveiled today will really drive value back into the market.
“At Atom, we offer a better, easier and more accessible alternative to the traditional high street banks. We believe in being a bank people can trust, and in giving customers great value products, with a fully digital, hassle free account opening experience. And saving with Atom means you are supporting the bank’s lending to UK mortgage customers and small businesses.”
In total, there have been £2.4billion worth of savings deposits from customers placed into Atom, and the provider states it is well rated. Indeed, it has a Trust Pilot rating of 4.6 stars when it comes to the matter of customer satisfaction – also a key concern for many savers.
The bank explains: “Atom’s fully digital model takes the hassle out of banking and provides people with a fast, easy and secure service that is easily accessible through a smartphone or tablet. Customers can manage the whole savings process on their device: browsing, opening and accessing all fixed savers via the Atom bank app. The app protects customers with pioneering banking security using biometric technology with both face and voice recognition.”
New customers to Atom will be able to download the app on smartphones – either from the Apple or Android Play stores, and should be able to open their account in “a few taps”, the bank has explained.
Savers with Atom also do not need to be worried about the safety and security of the money they deposit with the bank. This is because it is backed by the Financial Services Compensation Scheme (FSCS), which means should the worst happen, funds up to £85,000 are protected.
Individuals can open as many fixed saver accounts as they like, but should be aware the total savings balance with Atom is limited to £100,000. In addition, a minimum of £50 must be deposited into each account with the provider.
Once the fixed rate saver account is open, individuals will have until 9pm on the same day of the following week to add their funds. They will not be able to put any more money into their fixed saver once this deposit window has closed.
To open an account, individuals must be at least 18 years old. Atom is only offering sole accounts at this time, so those looking for a joint account should probably look elsewhere.
People will not be able to take out any money from a Fixed Rate saver until the end of the product term, when it matures. This maturity date is based on the product term and account opening date relevant to the specific saver.
However, Atom has said it will always contact its customers in this regard in order to give them a nudge when the fix is coming to an end. Britons can then tell the bank what they would like to do with their money next.