Atom Bank launches market-leading nine-month savings account

Atom Bank has launched a new nine-month fixed rate savings account paying 3.95%.

The ‘Fixed Saver’ account pays the highest interest rate for an account of this length. The bank also has a 6-month fixed rate account paying 3.55%.

This comes as a series of suppliers have raised their prices following the decision of the Bank of England to raise interest rate to 3%.

Rates are expected to rise further as the Bank attempts to reduce the level of inflation, which was 10.1% in September.

An account for short-term savers

Atom says the nine-month account was launched to provide more flexibility for savers. He says he understands people may not want to tie up money for long periods of time during the cost of living crisis and with interest rates set to rise further.

To open the account from the app-based bank, savers must deposit at least £50. Savers can apply through a mobile app (App Store or Google Play), but they cannot access the money during the term.

In October, Atom Bank was the first provider to offer rates above 5%the highest interest rate seen in a decade.

It currently offers the following fixed rate savings accounts:

  • 6 months: 3.55%
  • 9 months: 3.95%
  • 1 year: 4.35%
  • 2 years: 4.50%
  • 3 years: 4.65%
  • 5 years: 4.65%

Mark Mullen, CEO of Atom, said: “We understand that not everyone wants to tie up their money for years, so we’ve launched the nine month product to help those who may have shorter term goals. We’re not here to catch people either, so like all of our products, it’s easy to open, with no hidden requirements.

“While many leading banks refuse to pass on rising rates to savers, we continue to be the bank that does. Now more than ever, loyalty to your bank can harm your financial health, and we think it’s important that people understand that their bank can benefit from this.

Atom’s account vs others

Most of the top-rated accounts come from challenger banks such as Atom, Tandem, Close Brothers, and ICICI Bank. Although these banks are not big names, they still enjoy the same protection as the Financial Services Compensation Scheme (FSCS). This protects up to £85,000 per financial institution.

Atom’s nine-month account is a market leader because there are very few accounts that are fixed for this period. It is more common for providers to offer fixed rate accounts that start at 12 months.

The only other account of this length is from ICICI Bank UK, offered by Raisin, paying 3.75%.

The best one-year account at present is from Union Bank of India (UK) Ltd and pays 4.75%, followed by an account from United Trust Bank which pays 4.70%.

The best easy-to-access account pays 3%, from HSBC, followed by an account from Al Rayan Bank which pays 2.81%.

Will interest rates rise further?

Many savers are trying to decide whether it’s worth opening an account now or waiting for rates to rise further.

While rates are improving, the pace of increases has slowed since some accounts with fixed rate cash ISAs.

Rachel Springall, spokeswoman for Moneyfacts, said: “It’s really hard to tell whether savers should make a deal now or wait a bit longer, but savers need to consciously decide how long they’re willing to lock in their funds. because the highest rates don’t always stay on the shelf for long.

“If savers are willing to wait, we could handle one-year fixed bonds hitting 5%, and it’s worth remembering that just a month ago Atom Bank launched a five-year fixed bond at 5% and today Vanquis Bank and Union Bank of India (UK) Ltd is paying 5% on a two-year bond.