The retail legend isn't renowned for its bank. Is it a safe home for your money?
There’s a new name in the fixed rate savings bonds best buy tables but it's a familiar one to many of us, or at least the first bit is. It's Harrods Bank.
It’s launched a range of new accounts including an 18-month option paying 1.95%, a two-year fix paying 2.25% and a three-year account paying 2.50%.
The accounts can be opened with a single deposit from £20,000 up to £2,500,000 either at the bank’s only branch in Harrods' London department store, online or over the phone. Interest is paid annually and no withdrawals are permitted for the term.
Harrods Bank is just one of many unfamiliar names offering the top rates on fixed rate savings right now as more well-known high-street providers take a back seat.
But what is Harrods Bank? And is it a safe home for your savings?
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What is Harrods Bank?
Harrods Bank Ltd is the financial arm of world-renowned department store Harrods, based in Knightsbridge, London.
It’s a private bank that’s been around since 1893 and caters to high net worth individuals as well as businesses.
Like the store, the bank is owned by Qatar Holdings and offers a range of services including current accounts, savings accounts, mortgages, gold bullion and foreign currency from the second floor of Harrods' department store.
Until recently, Harrods Bank wasn’t a name the average saver was likely to know, as the bank only offered deals on a 'bespoke basis' priced individually for customers according to term and amount. But it has widened its appeal with the launch of a series of top fixed rate retail bonds.
The new 18-month, two- and three- year bonds join a relatively new line-up of bonds launched in December 2014 including a one-year fixed rate paying 1.75% and a five-year fixed rate paying 2.75%.
The bank also offers a two-year fixed rate paying 2% and three-year fixed rate paying 2.20% that come with the rather unique bonus of reward points you can spend in the store or in-store 'experiences' such as afternoon tea. These launched in November and remain available alongside the new higher rates for those tempted by the incentives, although you need to save an awful lot of money (£50,000+) to enjoy any perks.
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How does Harrods compare?
So how does the new range of fixed rate bonds from Harrods Bank compare? I’ve looked at the top five bonds in each category to find out.
18-month fixed rate bonds
Here’s how Harrods Bank compares across 18-month fixed rate bonds.
|
Account |
Interest rate (AER) |
Minimum deposit |
Access |
|
Al Rayan Bank 18-Month Fixed Term Deposit* |
2.00% |
£1,000 |
Online, branch, post, phone |
|
Harrods Bank 18-Month Fixed Rate Deposit Account |
1.95% |
£20,000 |
Phone, branch |
|
FirstSave Fixed Rate Bond |
1.90% |
£1,000 |
Online |
|
Hampshire Trust Bank 18-Month Bond (Issue 1) |
1.90% |
£1,000 |
Post |
|
1.85% |
£1,000 |
Online, branch, post, phone |
*Anticipated profit rate
As you can see Harrods Bank offers the second best rate when it comes to 18-month fixed rate bonds. It’s beaten by Al Rayan Bank which offers a 2% return on deposits from £1,000.
Two-year fixed rate bonds
Here’s how Harrods compares on two-year deals.
|
Account |
Interest rate (AER) |
Minimum deposit |
Access |
|
Secure Trust Bank Fixed Rate Bond Two-Year Term Series 10 |
2.33% |
£1,000 |
Online |
|
Al Rayan Bank Fixed Term Deposit* |
2.30% |
£1,000 |
Online, branch, post, phone |
|
Bank of Baroda Fixed Deposit |
2.25% |
£500 |
Online |
|
Shawbrook Bank Fixed Rate Bond |
2.25% |
£5,000 |
Online, post |
|
State Bank of India Fixed Term Deposit |
2.25% |
£10,000 |
Online |
|
Harrods Bank Two-Year Fixed Rate Deposit |
2.25% |
£20,000 |
Phone, branch |
*Anticipated profit rate
The top rate when looking for a two-year fixed rate bond is 2.33% from Secure Trust Bank.
Harrods Bank offers the joint-third best rate in this category with the Bank of Baroda, Shawbrook Bank and State Bank of India.
Three-year fixed rate deals
And finally here’s how Harrods Bank compares on three-year deals.
|
Account |
Interest rate (AER) |
Minimum deposit |
Access |
|
Secure Trust Bank Three-Year Fixed Rate Bond |
2.51% |
£1,000 |
Online |
|
Bank of Baroda Fixed Deposit |
2.50% |
£500 |
Online |
|
State Bank of India Fixed Term Deposit |
2.50% |
£10,000 |
Online |
|
Harrods Bank Fixed Rate Deposit |
2.50% |
£20,000 |
Phone, branch |
|
2.41% |
£1,000 |
Online |
*Anticipated profit rate
When it comes to three-year fixed rate bonds Harrods Bank again offers the second best rate in the market along with Bank of Baroda and the State Bank of India.
[SPOTLIGHT]You can keep on top of the best deals in The best fixed rate savings bonds.
So it's clear to see Harrods Bank has made an impact at the top of the best buys and is certainly a name you might want to consider if you have a lot of money to save. But is it a safe home for your money?
How safe is Harrods Bank?
The good news is Harrods Bank carries all the safety hallmarks savers should be looking out for.
It’s authorised and regulated by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA).
The provider also operates under its own banking licence and, most importantly, saving deposits are covered under the Financial Services Compensation Scheme (FSCS).
The FSCS safety net means the first £85,000 of deposits per individual (or £170,000 per couple) will be protected should the bank collapse.
This is exactly the same level of protection you’d get from a high street bank.
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