Cash ISAs: The Best Currently Available List

someone

If there is FSCS protection might be worth considering it may not cover the interest/profit with it been a 'target'.

When Dot Com Unity Credit Union had to use the scheme everyone was paid their capital plus the interest at the rate advertised. https://forums.moneysavingexpert.com/discussion/4938603

Not sure what would happen in the case of Al Rayan having to use the FSCS.

Rich2808

Al rayan bank pay their interest monthly - so while it's not guaranteed it is paid monthly and they haven't not met their expected profit yet.

And let's be blunt here - in the unlikely event the UKs largest Islamic bank with hundreds of thousands of customers went belly up you can pretty much guarantee a 100 per cent FSCS government bailout including profit.

So I doubt anyone need worry - it's FSCS protected.

Froggitt

fraz101 wrote: »

What's the sharia scheme

How do Islamic banking products such as savings accounts work? Will I be paid interest? What will I earn and is it Halal for me to earn from my savings?

Al Rayan Bank, and other Islamic banks, will not pay interest to customers that open a savings account with them. However, it is permissible for customers to earn a profit which is generated from the deposits they make with their Islamic bank.

Al Rayan Bank’s savings accounts are based on Islamic finance principles and pay profits. For example, the Al Rayan Bank Fixed Term Deposit Account is based on the Islamic financial principle of Wakala (Agency Agreement).

Under the Wakala Agreement, a customer deposits their savings with Al Rayan Bank and the Bank becomes their agent. Al Rayan Bank uses the cash deposit to invest in Sharia compliant and ethical trading activities and generate a target profit for the customer over a fixed term. The Bank manages and monitors the performance of the investments on a daily basis to minimise the risk and ensure that the customer receives the projected target (‘expected’) profit rate.

Customers are given a guarantee that their funds will only be invested in Sharia compliant and ethical investments, which will exclude all interest-bearing transactions and non-Sharia compliant business activities such as gambling, speculation, tobacco and alcohol. Currently investments take place in trades of low risk commodities (metals) and in the Bank’s Home Purchase Plans, whereby the rents received by the Bank for investing the customers’ funds are paid as profits, after deducting the Bank’s fees.

Al Rayan Bank therefore offers its customers a personal, highly managed service for their savings to ensure that they receive a competitive return based on ethical and Sharia compliant principles.

Is it permissible under the Sharia to quote a profit rate for Fixed Term Deposit savings accounts?

It is important to clarify that this Sharia compliant savings product(s) is called ‘Fixed Term’ and not ‘fixed return’. It is usually offered under the Islamic principle of Wakala (an agency agreement). With this product, the Islamic bank provides an expected profit rate over a set period of time as a ‘target’ based on the investment activity it will undertake with the deposits. The ‘Fixed’ element relates to the length of time the bank will undertake the investment activity for the customer. For example, two years for the Two Year Fixed Term Deposit Account.

These savings products do not offer a fixed return in the same way that conventional banks that pay interest do. Under Sharia, the bank cannot guarantee a rate of return, because with investment there is always an element of risk.

However, Islamic banks mitigate this risk for the customer in many ways, so that the customer’s deposits and return do not suffer. To date, for this type of savings product, Al Rayan Bank has always achieved the expected profit rate offered to its customers.

colsten

Rich2808 wrote: »

And let's be blunt here - in the unlikely event the UKs largest Islamic bank with hundreds of thousands of customers went belly up you can pretty much guarantee a 100 per cent FSCS government bailout including profit.

I don't share your "optimism" that the government would step in to re-imburse savers who couldn't be bothered to take notice of the FSCS. Nobody can say these days they haven't heard about the risk of banks and other financial institutions going bust so it is only fair that everyone assumes responsibility for their own money and either keeps their deposits below £75K or fully assumes the risk to lose everything above £75K.

Rich2808

colsten wrote: »

I don't share your "optimism" that the government would step in to re-imburse savers who couldn't be bothered to take notice of the FSCS. Nobody can say these days they haven't heard about the risk of banks and other financial institutions going bust so it is only fair that everyone assumes responsibility for their own money and either keeps their deposits below £75K or fully assumes the risk to lose everything above £75K.

Yes - clearly I meant within the FSCS £75k limit. But I doubt many have over £75k with that one bank.

And as I said - all profits are paid monthly.
I am very impressed with al Rayan - very efficient application and online systems. And for ISAs - very good rates.

veryintrigued

veryintrigued wrote: »

This will be the same as last years - i.e. 3%.

Detail is :

Starter ISA issue 6
3% variable
New money only
Opening balance of £10
Multiple monthly payments accepted
March 2017 can be used to make up any remaining balance if not used the £1270 in previous months.
New & existing customers
Transfers out subject to 180days loss of interest on transferred amount
Interest paid on maturity

https://www.thenottingham.com/savings/products/starter-isa-issue-6/

Rich2808

Here is the correct link for the Nottingham BS regular saver. It is more flexible than the Saffron version and is open to anyone who can make it to a branch. Most of their branches are in the East Midlands as you would expect but they have outposts elsewhere like St Albans and Harpenden in Hertfordshire.

https://www.thenottingham.com/savings/products/starter-isa-issue-6/

Sorry - two minutes too late.

veryintrigued

Rich2808 wrote: »

It is more flexible than the Saffron version

Last year the Saffron allowed withdrawals and variation of monthly amounts so (apart from being able to top up in the final month) was more flexible than the Notts.

Its not clear to me if the Saffron has these features this year. The statement below (from 'our' link) implies that withdrawals are allowed - possibly lose the ISA status on the withdrawn amount (rather than the whole amount).

Any withdrawal or closure of the account will result in loss of ISA status.


PS also worth noting the Notts one is listed as variable interest - although they tend to list all their (non ISA) fixed term regular savers as variable now.

Kazza242

veryintrigued wrote: »

https://www.thenottingham.com/savings/products/starter-isa-issue-6/

The link to the Nottingham BS Starter ISA (issue 6) is on the first post.

I've also added the new Penrith Building Society Help to Buy ISA, paying 4.00%, as well as a host of other ISAs that have launched today.

veryintrigued

Kazza242 wrote: »

The link to the Nottingham BS Starter ISA (issue 6) is on the first post.

Is it worth mentioning that the final (March 2017) payment can be used to make up any remaining balance i.e. greater than £1270.

Also on the Saffron ISA is it definitely no withdrawals?