Gatehouse Bank is offering a near-market-leading rate of seven percent on its regular savings account, and savers can get started with just £1.
Regular savings accounts work well for people looking to start a savings habit, as the terms generally encourage savers to pay money into the accounts monthly.
To earn interest, savers must meet certain requirements, which generally involve making minimal withdrawals and depositing regularly.
Gatehouse Bank’s product is open to all UK residents aged 18 and over but is “especially well-suited” to young people or those with smaller deposits, as it can be opened with a minimum of £1.
Following this, customers can make monthly deposits of up to £300, which can be done through an unlimited number of transactions.
The Bank operates under Sharia principles, which means an ‘Expected Profit Rate’ is earned instead of interest. To date, it assures it has always generated and paid customers the EPR stated when the account is opened.
The launch of the account follows Gatehouse Bank’s research into UK adults’ attitudes towards money, which revealed an increasing focus on saving.
Nearly half (45 percent) of respondents identified as a saver rather than a spender. Meanwhile, one in 10 adults (11 percent) said that their mindset had shifted towards saving in the last 12 months due to financial challenges like the cost of living crisis.
The same study found young people are more inclined to save for specific milestones such as a new car, a wedding or buying a home. Just under a third (30 percent) of 18 to 24-year-olds were saving for a house, a fifth (21 percent) to get married and over a quarter (28 percent) to start a family.
With this research in mind, customers can use the account to save towards their specific goals. Users can customise their savings pot by renaming it to suit their individual needs (e.g. a rainy day fund, wedding fund) to help them stay motivated.
Withdrawals are not permitted until the end of the term, after which the account automatically rolls over into a Gatehouse Bank Easy Access account.
Commenting on the product, Ravi Kumar, senior product manager at Gatehouse Bank said: “Whether customers are saving for a significant milestone or aiming to build their rainy-day fund, it is important to set specific savings goals, which help to stay motivated and accountable and ultimately create positive habits.
“Gatehouse Bank’s Regular Saver account has been designed to provide a competitive return for customers who make regular deposits and allows them to proactively check progress against their goals
“While our Regular Saver fills a gap in the Shariah-compliant market, the account is open to anyone, regardless of their beliefs, and we hope it will help set younger generations of savers on the right path towards improving their financial security.”
But while Gatehouse is offering a particularly competitive rate, it isn’t currently taking the top spot. Nationwide is offering an Annual Equivalent Rate (AER) of eight percent. The rate is fixed for 12 months and Britons can get started with just £1.
Interest is calculated daily and paid on maturity of the account exactly one year after opening. The rate is based on how many withdrawals a person makes in the year – if four or more are made, interest will drop to 2.15 percent. Savers can deposit up to £200 per month and savers must have a Nationwide Current Account to apply.
