By clicking a retailer link you consent to third-party cookies that track your onward journey. This enables W? to receive an affiliate commission if you make a purchase, which supports our mission to be the UK's consumer champion.
New instant-access savings account beats Marcus with 1.6% rate
Al-Rayan Bankhas launched new easy-access savings account paying an expected profit rate of 1.6%, making it a new market-leader.
The news comes after Goldman Sachs cut the rate of its once table-topping savings account, Marcus, for new customers.
When Marcus launched a year ago, it offered an initial interest rate of 1.5%, making it the highest easy access rate for two-and-a-half years. At the time, this was a welcome surprise for savers, with 50,000 customers flocking to open an account in the first two weeks of opening.
New joiners are now being offered a more modest 1.45% for their first year or savings, which falls to 1.35% thereafter.
Here we look at what the Al-Rayan account has to offer and other savings accounts that currently pay more interest than Marcus.
What does the Al-Rayan Everyday Saver offer?
Al-Rayan Bank has shot to the top of the instant-access savings table with the launch of its new 'Everyday Saver' account, which pays an impressive 1.6% EPR.
Customers will need a minimum deposit of £500 and can save a maximum of £1m into the account.
The account can be opened online, by phone, in branch or via the mobile app.
There are no restrictions on the number of withdrawals you can make from the account and the expected profit is paid monthly.
Al-Rayan is a Sharia-compliant bank, which means that it offers an EPR rather than an annual equivalent rate (AER) of interest on savings. As such, the bank may pay out a lesser amount of interest if its profits fall short, though to our knowledge, this has not yet happened with Al-Rayan.
- Find out more: how do Sharia-compliant savings work
How does the Al-Rayan Everyday Saver compare?
The rate of return on the Al-Rayan 'Everyday Saver' surpasses the next best savings rate of 1.45% offered by both Marcus and Cynergy Bank.
However, you can open these other savings accounts with just £1, whereas you'll need £500 to open the Al-Rayan account.
The table below shows how the new Al-Rayan Everyday Saver compares to the other instant-access savings accounts on the market.
| Account | Rate of return | Min deposit |
| Al-Rayan Bank | 1.6% EPR | £500 |
| Marcus Bank | 1.45%* AER | £1 |
| Cynergy Bank | 1.45%* AER | £1 |
| Virgin Money Double Take E-Saver Issue 11 | 1.43% AER | £1 |
| Virgin Money Man Utd Double Take E-Saver Issue 6 | 1.43% AER | £1 |
*reverts to 1.35% after the first year **reverts to 0.75% after the first year Source: Which? Money Compare. Rates correct as of 13 September 2019, but are subject to change.
- Find out more:How to find the best savings accounts
Unlocking better returns on your savings
Savings account interest rates have been notoriously lacklustre, but it might be possible to earn more by opting for the right type of account.
One-year fixed-rate savings accounts
One-year fixed-rate savings accounts offer savers the chance to access better rates, though you'll need to lock your money away.
The table below shows the top five fixed-rate accounts available right now.
| Account | Rate of return | Minimum initial deposit |
| Bank of London & The Middle East one-year fixed-rate savings account | 2.1% EPR | £1,000 |
| Al Rayan Bank one-year fixed-rate savings account | 2.07% EPR | £1,000 |
| First Save one-year fixed-rate savings account | 1.95% AER | £5,000 |
| Gatehouse Bank one-year fixed-rate savings account | 1.95% EPR | £1,000 |
| Metro Bank fixed-term savings 1 year | 1.85% AER | £500 |
Source: Which? Money Compare Rates correct as of 13 September 2019, but are subject to change.
As a general rule, the longer the term on your account, the more you'll earn, so you could consider a longer fixed-term account. Just keep in mind you may not be able to withdraw the money at all, or may face a penalty.
Regular savings accounts
Regular savings accounts can offer another alternative, especially if you have a lower initial deposit.
You'll need to save a certain amount each month. Depositing less or withdrawing any money could mean that you lose out on the interest you've earned.
Take the First Direct Regular Saver, for example. This account offers savers 5% AER who make monthly deposits of between £25 and £300. If you withdraw any money during the 12-month period, your interest rate will drop from 5% to just 0.15%.
The accounts often also have a maximum monthly savings amount - for First Direct, it's £300, so won't suit savers with a large sum to stash away.
Be sure to read the terms and conditions of an account carefully before committing to one.
The table below shows a round-up of the best regular saver rates available.
| Account | Rate of return | Min deposit | Monthly savings |
| First Direct Regular Saver | 5% AER | £25 | £25-£300 |
| M&S Monthly Saver | 5% AER | £25 | £25-£250 |
| HSBC Regular Saver (preferential rate) | 5% AER | £25 | £25-£250 |
Source: Which? Money Compare Rates correct as of 13 September 2019, but are subject to change.
How to find the best savings account
Finding the right type of savings account will depend on your financial circumstances.
While fixed-rate savings accounts pay higher interest, they are more restrictive.
So if you think you'll need to dip into your savings for an emergency, it might be best to consider accounts that pay lower rates of interest but offer better flexibility when accessing your money.
For more help and tips check out our guide onfinding the best savings account where we reveal the best and worst savings account providers.
Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Money Compare is a trading name of Which? Financial Services Limited.
