Challenger bank launches competitive savings accounts.
There's a new name popping up in the best buy tables - Charter Savings Bank.
The challenger bank has launched a range of savings deals, from easy access to long-term fixed rate bonds. But who is Charter Savings Bank? And what will you get for your money?
Charter Savings Bank: the story so far
Launched in January 2015, UK-based Charter Savings Bank focuses its energy purely on savings, as its name suggests.
It has no branches, so you need to apply online or over the phone. It promises that all products are very simple.
It’s part of Charter Court Financial Services (CCFS), a financial services business specialising in mortgages and savings. Charter Savings Bank is covered by the Financial Services Compensation Scheme, so the first £85,000 you deposit are entirely safe.
Easy access savings
Easy access accounts, as you can guess, allow you to withdraw cash from your account when you please, with no penalties.
Charter's account offers 1.25% and can be opened with £1,000. However, as the table below shows, you can do far better elsewhere.
|
Account |
Interest rate (gross AER) |
Minimum deposit |
Access |
|
Kent Reliance Branch Easy Access Savings Issue 1 |
1.5% |
£1,000 |
In-branch |
|
The West Brom Limited Access Saver* |
1.4% |
£1 |
In-branch |
|
Earl Shilton BS Progress |
1.4% |
£100 |
In-branch, post |
|
Coventry BS PostSave Easy Access (2) |
1.4% |
£500 |
Online, in-branch, post, phone |
|
Teachers BS Premier Saver |
1.35% |
£3,000 |
In-branch, post |
*Limited to six withdrawals
Compare easy access accounts with lovemoney.com
Notice Account
Notice accounts are similar to easy access in that you can withdraw money without financial penalty. The main difference is that you need to give your bank a specified amount of notice before accessing your cash; typically 30-120 days.
Charter Savings Bank is offering a 95 day notice account at 1.75% AER, again with a minimum deposit of £1,000. Here’s how it compares:
|
Account |
Interest rate (AER) |
Minimum deposit |
Access |
|
Al Rayan Bank 120 Day Notice |
1.81%* |
£250 |
Online, in-branch, post, phone |
|
Charter Savings Bank 95 Day Notice |
1.75% |
£1,000 |
Online |
|
Shawbrook Bank 120 Day Notice Personal Savings Account |
1.75% |
£1,000 |
Online, post |
|
Paragon Bank 120 Day Notice Account |
1.6% |
£500 |
Online |
|
GE Capital Direct GE 100 Day Notice |
1.55% |
£500 |
Online |
|
Shawbrook Bank 95 Day Notice Personal Savings Account |
1.55% |
£1,000 |
Online, post |
|
Raphael’s Bank Sapphire Account (six month's notice) |
1.55% |
£5,000 |
In-branch, post |
|
Julian Hodge Bank 90 Day Notice Deposit |
1.55% |
£10,000 |
In-branch, post |
*Expected profit rate
Compare notice accounts with lovemoney.com
Fixed Bonds
Charter Savings Bank offers a range of fixed rate bonds so you can keep money locked away for between one and five years.
One-year and 18-month bonds
You can get 1.8% AERwith a one year bond from Charter Savings Bank, with a minimum deposit of £1,000.
|
Account |
Term |
Interest rate (AER) |
Minimum deposit |
Access |
|
NS&I 65+ Guaranteed Growth Bond |
One year |
2.8% |
£500 |
Online, post, phone |
|
Al Rayan Bank Fixed Term Deposit |
18 month |
2.02%* |
£1,000 |
Online, in-branch, post, phone |
|
Harrods Bank 18 Month Fixed Rate Deposit |
18 month |
1.95% |
£20,000 |
In-branch, post |
|
Al Rayan Bank Fixed Term Deposit |
12 month |
1.9%* |
£1,000 |
Online, in-branch, post, phone |
|
FirstSave 18 Month Fixed Rate Bond |
18 month |
1.9% |
£1,000 |
Online |
|
Shawbrook Bank 18 Month Fixed Rate Bond |
18 month |
1.9% |
£5,000 |
Online, post |
|
Charter Savings Bank Fixed Rate Bond |
One year |
1.8% |
£1,000 |
Online |
|
Bank of Cyprus UK Bond |
18 month |
1.8% |
£1,000 |
Online, in-branch, post, phone |
|
BLME Sharia’s compliant Premier Deposit Account |
18 month |
1.8%* |
£25,000 |
Online |
*Expected profit rate
As you can see, if you don't want to lock your money up for 18 months or you aren't over 65, the Charter Savings Bank one-year bond is a cracking choice, bested only by the Al Rayan one-year bond.
Two year
The 1.9% AER offered by Charter is a fair way off the top two-year bonds.
|
Account |
Interest rate (AER) |
Minimum deposit |
Access |
|
Al Rayan Bank Fixed Term Deposit |
2.32%* |
£1,000 |
Online, in-branch, post, phone |
|
Harrods Bank 2 Year Fixed Rate Deposit |
2.25% |
£20,000 |
In-branch, post |
|
Shawbrook Bank 2 Year Fixed Rate Bond Issue 27 |
2.2% |
£5,000 |
Online, post |
|
UBL 2 Year Fixed Term Deposit |
2.15% |
£2,000 |
In-branch, post |
|
Close Brothers Select Gold Fixed Term Deposit |
2.15% |
£10,000 |
Post |
*Expected profit rate
Three year
Charter is only offering 2% AER on its three-year bond, so again it's well off the pace of the best buys.
|
Account |
Interest rate (AER) |
Minimum deposit |
Access |
|
NS&I 65+ Guaranteed Growth Bond |
4% |
£500 |
Online, post, phone |
|
2.7% |
£10,000 |
Online |
|
|
Close Brothers Select Gold Fixed Term Deposit |
2.5% |
£10,000 |
Post |
|
Harrods Bank 3 Year Fixed Rate Deposit |
2.5% |
£20,000 |
In-branch, post |
|
UBL 3 Year Fixed Term Deposit |
2.45% |
£2,000 |
In-branch, post |
|
Shawbrook Bank 3 Year Fixed Term Deposit |
2.45% |
£5,000 |
Online, post |
*Money protected by Maltese Depositor Compensation Scheme
Four year
Charter is a fair bit off the top of the table with four-year bonds too.
|
Account |
Interest rate (AER) |
Minimum deposit |
Access |
|
2.61% |
£1,000 |
Online |
|
|
State Bank of India Fixed Deposit |
2.6% |
£10,000 |
In-branch, post |
|
Shawbrook Bank 4 Year Fixed Bond Issue 8 |
2.6% |
£5,000 |
Online, post |
|
Kent Reliance 4 Year Fixed Rate Bond (Issue 8) |
2.35% |
£500 |
Online, in-branch, post |
|
Tesco Bank Fixed Rate Saver |
2.35% |
£2,000 |
Online, phone |
|
2.25% |
£1,000 |
Online, post, phone |
|
|
Charter Savings Bank Fixed Rate Bond |
2.1% |
£1,000 |
Online |
Five year
Charter Savings Bank’s offering of 2.5% AER is nowhere near competitive when it comes to five-year bonds:
|
Account |
Interest rate (AER) |
Minimum deposit |
Access |
|
3.3% |
£10,000 |
Online |
|
|
UBL 5 Year Fixed Term Deposit |
3.02% |
£2,000 |
Online, in-branch, post |
|
Close Brothers Select Gold Fixed Term Deposit |
3% |
£10,000 |
Post |
|
Secure Trust Fixed Rate Bond 9th Issue |
2.96% |
£1,000 |
Online |
|
FirstSave 5 Year Fixed Rate Bond 9th Issue |
2.95% |
£1,000 |
Online |
|
Paragon Bank Five Year Fixed Rate |
2.91% |
£1,000 |
Online |
|
State Bank of India Online 5 Year Fixed Term Deposit |
2.9% |
£10,000 |
Online |
|
2.8% |
£1,000 |
Online |
*Money protected by Maltese Depositor Compensation Scheme
So as you can see, Charter has decent deals on notice accounts and one-year bonds, but isn't a great option if you want to lock your money up for longer.
Compare fixed bonds with lovemoney.com
Current accounts are still better
[SPOTLIGHT]Bizarre as it sounds, current accounts still thrash savings accounts when it comes to returns.
The Nationwide FlexDirect account offers you 5% for the first 12 months on balances up to £2,500.
TSB’s Classic Plus account also offers 5% on balances up to £2,000, and not as a mere teaser rate - the rate won't fall after a year.
Or if you have a bigger pot of savings, how about the 123 Current Account from Santander? You can get 3% interest on balances between £3,000 and £20,000 with up to 3% cashback on household bills. Bear in mind there is a £2 monthly fee though.
Compare more current accounts with lovemoney.com
More on savings:
March 2015’s premium bonds winning numbers
Agribank: earn up to 3.3% on your savings