Banking

Best buy savings rates: Who are Allicia, DF Capital, SmartSave and Tandem?

I was looking at the best buy savings rates in your tables recently but I don’t recognise the names of the providers.

I see Tandem Bank are offering a top 0.65 per cent on its easy-access, SmartSave Bank are offering 1.36 per cent over one-year deal whilst Allicia Bank are offering 1.35 per cent.

SmartSave are also the best buy for two and three year fixed deal whilst another provider I’ve never heard of called DF Capital is just 0.01 per cent behind them.

Can you tell me a little more about who these banks are, whether my money is safe and what they do with cash they get in from savers before I make a decision and open an account with any of them? D.B, via email.

It can be hard trusting your hard earned savings with names you have never heard of.

Ed Magnus, of This is Money, replies: You won’t be alone if you take a look at our best buy savings tables and don’t recognise a large number of the names.

In recent years, when it comes to savings rates, it has been the smaller challengers that have led the way, and noticeably big – familiar – banks are absent. 

Peppered in there are building society names and perhaps established challengers that you have seen in and out of the best buy tables for the last decade. 

Our tables are carefully curated by savings guru Sylvia Morris. They are independently sourced and only banks with a certain criteria feature. 

Crucially, all the banks or building societies included on our list are registered with the Financial Services Authority and signed up to the Financial Services Compensation Scheme.

This means your money is either directly protected up to £85,000 or indirectly via its passport scheme where the compensation limit depends on the bank’s home country – in Europe it is €100,000.

It is also important to point out that our tables are unbiased – we simply put the best buy rates top, in order, regardless of any affiliate link.    

Another note to mention is customer service: before you are tempted to open an account at any bank, make sure you read reviews and establish how quickly you can contact it if anything goes wrong.  

FIXED-RATE ACCOUNTS 
Type of account (min investment)                   0% tax 20% tax 40% tax
ONE YEAR                         
SmartSave Bank (£10,000+)                   1.36 1.09  0.82 
Allica Bank (£10,000+)                    1.35 1.08 0.81
Tandem Bank (£1+)                    1.35 1.08 0.81
TWO YEARS                  
Smart Save Bank (£10,000+)                   1.56 1.25  0.94 
DF Capital (£1,000+) (5)                   1.55 1.24  0.93
Hodge Bank (£1,000)                    1.50 1.20 0.90
THREE YEARS                  
SmartSave Bank (£10,000+)                   1.66  1.33  1.00 
DF Capital (£1,000+)(5)                   1.65  1.32  0.99 
Hodge Bank (£1,000+)                    1.60 1.28 0.96

The competition at the top has been ramping up in recent months and we are seeing the top spot regularly changing hands as rates inch upwards, which is a good sign for savers. 

Although rates are still very low, without these lesser-known names, it’s likely deals on the whole would look even less enticing. 

Look at the more familiar names and you’ll see the UK’s biggest banking groups pay less than 0.1 per cent on average across their range of easy access accounts – typically paying between 0.02 per cent to 0.06 per cent.

Some big names even pay as low as 0.01 per cent.

Compared to these rates, our best buys look like a no brainer, but even when compared to the market average they look very strong. 

The average easy access account pays just 0.18 per cent, according to Moneyfacts the average one year fixed rate deal pays 0.66 per cent, the average two year offers 0.75 per cent, and the average three-year deal pays 0.99 per cent. 

We take a closer look at the four lesser known savings providers that mentioned by our reader and are among those bucking the trend set by the big players.

Tandem is a challenger bank founded in 2015. It purchased Harrods Bank in August 2017 giving it access to a full banking licence as well as Harrods Bank’s mortgage and savings books. 

It leads the market for easy-access savings accounts, paying 0.65 per cent, whilst allowing its customers unlimited access to their cash at anytime.

its rate is close to four times higher than the average easy access rate paying just 0.18 per cent.

It is also currently offering a one year fixed rate deal paying 1.35 per cent – more than double the market average rate of 0.66 per cent.

Unlike many savings providers which require large deposits to set up an account, Tandem will let you set up a savings account with just £1.

By opting to save via Tandem you’ll also be helping to support Tandem Bank’s green lending initiatives, with the aim of helping to make UK homes more sustainable and environmentally friendly. 

Tandem’s savings products are all FSCS protected meaning if it were to go bust, savers money is protected up to £85,000.  

It is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority. 

Tandem's 0.65% is nearly four times' the rate of the average easy-access

Tandem’s 0.65% is nearly four times’ the rate of the average easy-access

SmartSave Bank was created by British bank, Chetwood Financial and is authorised by the PRA and regulated by​ the FCA and the PRA.

All deposits with SmartSave, up to £85,000, are protected by the FSCS, the UK’s deposit guarantee scheme.

SmartSave’s one-year fixed rate deal pays 1.36 per cent, which is more than double the market average rate of 0.66 per cent.

Its two-year fixed deal paying 1.46 per cent, is also more than double the market average rate of 0.75 per cent.

The only slight hurdle for savers to overcome is that you’ll need a minimum deposit of £10,000 to start an account and you can only hold one savings account at a time.

SmartSave are also only offering sole savings accounts, which means you cannot hold the savings account jointly with someone else.

The maximum total amount that may be deposited in the savings account is £85,000.

Chetwood is based in Wrexham and it has two other arms alongside SmartSave – LiveLend and BetterBorrow, which are for personal loans.

The average easy access account pays just 0.18%, according to Moneyfacts, whilst the average one year fixed rate deal pays 0.66%

The average easy access account pays just 0.18%, according to Moneyfacts, whilst the average one year fixed rate deal pays 0.66%

Allicia Bank was granted its UK banking licence in September 2019.

It has offices in Milton Keynes and London and a team of relationship managers up and down the country providing support to small businesses.

It is authorised by the PRA and regulated by the FCA and the PRA and all its savings accounts are FSCS protected up to £85,000 and free to use.

It currently pays 1.35 per cent on its one year fixed rate deal which is over double the market average at 0.66 per cent.

Like SmartSave its one limitation is that you must deposit a minimum of £10,000 to start off, but it allows for a maximum of £250,000 for those looking to stash away a large amount.

Applications must be made online so you will need internet access and a mobile phone in order to complete the security checks.

DF Capital was founded in 2016 and is based in Manchester. It is a niche commercial lender helping small and medium sized business across the UK.

It was authorised as a bank in September 2020 which enabled it to begin offering personal savings accounts to individual customers.

It is authorised by the PRA and regulated by the FCA and the PRA, and any deposits with DF Capital are protected up to a total of £85,000 by the Financial Services Compensation Scheme.

Its two year fixed rate deal pays 1.55 per cent and its three year fixed rate deal pays 1.65 per cent, both well above the market average of 0.75 per cent and 0.99 per cent respectively.

All interest earned on your savings will be paid when the account matures and savers can set up an account with £1,000 so the barrier to entry is not too high.

How to find the best savings rates

Best buy savings rates: Who are Allicia, DF Capital, SmartSave and Tandem?

Savings rates have been in the doldrums for a while and exacerbated by the pandemic.

But there are ways to ensure your cash is in the best of the bunch at all times. 

Over the past few years a number of savings platforms have launched, offering savers the option to switch as and when better deals become available. 

They each work slightly differently and include their own exclusives. To check out what’s on offer take a look yourself:

> Hargreaves Lansdown Active Savings

> Raisin 

> Flagstone  

Or you can view This is Money’s comprehensive best buy savings tables here, independently curated by savings guru Sylvia Morris:

> Compare best savings rates now 

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

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