App-based bank Atom Bank has increased the rates on four of its fixed rate bonds, with some of them climbing into the top 3 the best buy tables.
The challenger bank has put its one-year fixed saver to 1.95 per cent, its two-year to 2.1 per cent, its three-year to 2.25 per cent and its five-year to 2.25 per cent.
In April, the bank also announced it had appointed Black Eyed Peas star will.i.am as a strategic board advisor, with a brief to offer an “external perspective on culture, philanthropy and technology”.
Atom is a mobile-only bank and accounts can only be opened via its smartphone and tablet app.
The one-year fixed saver beats accounts offered by Paragon Bank, RCI Bank and others, but it can be beaten by Castle Trust one-year bond which offers a market-leading 2.25 per cent.
The two-year fixed rate bond is higher than rates offered by banks like Paragon and OakNorth Bank, which pay 2.05 and 1.91% respectively, but it is again beaten, albeit marginally, by Castle Trust (2.5 per cent).
Atom’s three and five-year bonds are again near the top of the table, with the five-year only being beaten again by Castle Trust’s corporate bond.
The market-leading three-year bond also beats the rate offered by National Savings & Investments (2.2 per cent). On the other hand, that NS&I product only allows a maximum deposit of £3,000, while the Atom savers all allow up to £100,000 – although it’s worth noting that only £85,000 is protected by the Financial Services Compensation Scheme. The minimum opening balance is set at £50.
As an app-based bank, Atom doesn’t have any branches, which is a low-cost banking model it says allows it to offer good rates. However, some commentators think the lack of physical branches, plus requiring account holders to use biometric security to log in and out of its app, alienates the provider from some older savers.
Atom is also planning to launch a current account, possibly in 2018, pending the results of a review of current accounts by the Financial Conduct Authority.