New savings account offers market-leading rate - a sign rates are being 'pushed in the right direction'
A new savings account is offering customers a rate of 5.2% AER - making it a market leader.
Raisin UK has partnered with Al Rayan Bank to offer the one-year Fixed-Term Deposit account.
Those who deposit £1,000 can expect to have £1,052.00 in their account by the end of the year.
The minimum deposit is £1,000, while the maximum is £85,000.
Customers will not be able to withdraw from the account for the year.
It is operated under Shariah principles, meaning interest cannot be earned but some of the profit the bank earns will be returned to you - meaning you can grow your savings without earning interest.
Anna Bowes, co-founder of Savings Champion, tells the Money blog...
"It's good to see that although the markets are expecting the base rate to fall in the near future, the anticipated date for this keeps being pushed back, and this seems to have stimulated a little bit of competition among some savings providers – in particular fixed-term bonds - pushing rates upwards.
"This latest increase from Al Rayan Bank, available both directly and via the Raisin UK cash platform, is exactly what we like to see, and hopefully it will create a little more competition from other providers - pushing rates further in the right direction."
Anna points out this rate can be beaten with shorter fixes but in that instance "you'll need to find another home for your money on maturity, so fixing for a bit longer could actually realise more of a return in the end".