Milestone Savings: new name offering competitive savings deals

There’s a new name offering competitive fixed rate bonds. We check out how it stacks up.

You might not have heard of Milestone Savings, but it’s currently offering a range of competitive fixed rate bonds.

It’s yet another unfamiliar name to feature in the best buy tables at the moment.

So we’ve taken a look at what it offers, how it compares and whether it’s a safe place for your money.

Who is Milestone Savings?

Milestone Saving is the trading name of Gatehouse Bank, a London-based investment bank, which specialises in Shariah-compliant products.

It’s been around since 2008, but Milestone Savings was launched in November last year offering a range of fixed rate saving bonds.

What’s on offer?

Below is a roundup of what’s on offer from Milestone Savings right now.

*Anticipated profit rate

All of the deals require a minimum deposit of £10,000 and allow you to save up to £1 million. Accounts can be opened online.

As these are Shariah-compliant products, they don’t offer interest. Instead you will get an expected profit rate based on what the bank thinks it can achieve by investing funds.

Gatehouse Bank will take the deposits and invest the funds in a portfolio of assets in accordance with Shariah principles, with the aim of generating the expected profit rate.

If the investments make more than expected you will still only be entitled to the expected profit rate quoted at the time of opening the account. But if it makes less the bank will contact you and give the option to close the account.

How does it compare?

So how does Milestone Savings compare to what’s on offer from other providers?

I’ve taken a look at where the products rank right now compared to the top three best deals for savers with up to a minimum £10,000 deposit.

One-year fixed rate bonds

When it comes to one-year fixed rate deals Milestone Savings has dropped behind recent interest rate increases from the likes of United Trust Bank and Vanquis Bank. A cluster of other providers also offer 1.90% and with lower minimum deposits to boot.  

Two-year fixed rate bonds

*Anticipated profit rate

Looking at two-year bonds it’s a similar story. Milestone Savings offers a decent rate, but it has fallen behind recent interest rate rises from Vanquis Bank and Secure Trust Bank, which now pays 2.21%.

Three-year fixed rate bonds

Milestone Savings is less impressive over three years. Its 2.35% offering is significantly off the pace.

Five-year fixed rate bonds

Over five years Milestone Savings fares even worse. Its rate of 2.65% is miles behind the leaders.

Overall Milestone Savings offers a decent range of deals, though it has fallen back behind recent interest rate rises from its rivals. We will have to wait and see if it responds with rises of its own. 

Compare fixed rate bonds

Is my money safe?

Savers are increasingly having to look to unfamiliar names like Milestone Savings to secure better deals on their money, but there's a natural fear of the unknown.

However, Milestone Savings is just as safe as familiar high street names.

It’s authorised and regulated by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) and if you have a problem you can complain to the Financial Ombudsman Service (FOS).

And most importantly Milestone Savings is part of the Financial Services Compensation Scheme (FSCS), which protects deposits of up to £85,000 per person per institution in the UK should the firm go bust.

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