There’s a new bank in town with a competitive one-year fixed-rate of 1.49%… but is Allica Bank a safe spot for your cash?
- Its one-year fixed-rate is enough for ninth place in our savings tables
- It pays more than well-known names like Goldman Sachs’ Marcus
- The London-based bank received its licence in September 2019, and has now launched its first savings account
This is Money’s best buy tables are frequently dominated by lesser-known banks, who put the high street names to shame by offering savers better rates.
One of the newest names in our one-year fixed-rate tables is Allica Bank, which has launched a 12-month tie-up paying 1.49 per cent.
This is enough for ninth place in our tables, with the one-year fixed-rate market holding out fairly well despite big cuts to the Bank of England base rate and millions of pounds in cheap money being made available to banks to lend.
Some of the banks in This is Money’s best buy tables may need a closer look from interested savers, as they are often not well-known names. Allica Bank is a newcomer
Vanquis Bank pays a top rate of 1.6 per cent, two banks pay 1.55 per cent, Charter Savings Bank 1.51 per cent on balances of £5,000, and four more banks 1.5 per cent.
But while Allica Bank’s offer is nestled comfortably in the chasing pack rather than out in front, it isn’t a bad start for the newcomer, paying 0.04 percentage points more than a one-year offer from Marcus, backed by Wall Street giant Goldman Sachs.
The London-based bank has only been going since September 2019, with this its first offer aimed at individual savers.
It is fully covered by the Financial Services Compensation Scheme, meaning savings of up to £85,000 are protected.
Allica, backed by investment manager Warwick Capital Partners, is primarily a business lender aimed at SMEs.
It does not yet offer business savings nor a business current account, but those are in the works.
It offers commercial mortgages up to £2million with a maximum loan-to-value of 75 per cent, and its launch into offering savers fixed-term deposits is likely either to diversify the funding for these loans or to be used for other business lending products.
Its chief executive Mark Stephens said in an interview just after the bank gained its licence last September that it was aiming to launch asset finance for businesses in mid-2020 and was developing saving accounts for businesses.
Its 1.49 per cent one-year fixed-rate can be opened online with £1,000.