MSE News: New sharia account offers 1.6% easy-access savings - but should you get it?

Former_MSE_Karl

Savings rates may have been dropping recently, but Islamic-compliant challenger bank Al Rayan Bank has bucked the trend by launching a new sharia account paying an 'expected profit' of 1.6% variable....

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New sharia account offers 1.6% easy-access savings - but should you get it?'

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[Deleted User]

No thanks - I’ll pass...

triplea35

Not sure why the title should have the negative connotation: 'but should you get it?'
The article explains it is the best rate around at a time when rates are falling and explains that it is a Sharia account.
My wife and I both have fixed term deposits with Al Rayan and have found the service excellent (though not used the online banking) and see no reason not to try this.

triplea35

!!! wrote: »

No thanks - I’ll pass...

Would you explain why?

quirkydeptless

Opened Today :money:

EthicsGradient

Now Al Rayan Bank has topped that with the launch of its new Everyday Saver account paying 1.6% - though as it's a sharia account which follows Islamic banking principles, that's an 'expected profit rate' rather than interest. As a result, the rate isn't technically guaranteed - though Al Rayan Bank's always paid out on its 'expected rate' in the past, and it told us there have even been a few occasions where it's paid out more than its expected rate.

The Everyday Saver account can be opened online, by phone or in branch with £500+. Al Rayan Bank is a fully-regulated UK bank and offers full £85,000 UK savings safety protection. It was previously known as the Islamic Bank of Britain.

And yet, when we look at their own records, we find, from Jan 2008, 3 out of 6 of their accounts were 0.25% below their target rate: https://www.alrayanbank.co.uk/media/37102/actualsavingsprofitratesjanuary2008.pdf

This seems worth bearing in mind - in a bad recession, they can miss the target, whatever they now claim.

Uxb1

Tried to apply
Website failed at stage 4 of 5: totally unresponsive
Will try again tomorrow - else it will be a formal complaint: sigh....

chamelion

Uxb1 wrote: »

Tried to apply
Website failed at stage 4 of 5: totally unresponsive
Will try again tomorrow - else it will be a formal complaint: sigh....

To your isp?

cool_dude_2000

!!! wrote: »

No thanks - I’ll pass...

And why is that I wonder?

eskbanker

EthicsGradient wrote: »

And yet, when we look at their own records, we find, from Jan 2008, 3 out of 6 of their accounts were 0.25% below their target rate: https://www.alrayanbank.co.uk/media/37102/actualsavingsprofitratesjanuary2008.pdf

This seems worth bearing in mind - in a bad recession, they can miss the target, whatever they now claim.

The 'always paid out on its 'expected rate' in the past' line isn't just MSE spin, it's actually claimed by Al Rayan themselves in the press release for the new account (and their guide to 'expected profit'):

Since Al Rayan Bank was founded in 2004, it has always paid the rate of profit it has quoted to its customers

Wonder what the FCA has to say about an institution publishing contradictory statements....

boo_star

triplea35 wrote: »

Not sure why the title should have the negative connotation: 'but should you get it?'
The article explains it is the best rate around at a time when rates are falling and explains that it is a Sharia account.
My wife and I both have fixed term deposits with Al Rayan and have found the service excellent (though not used the online banking) and see no reason not to try this.

The reason why is because the rate isn't guaranteed.

Despite their assurances they could end up giving you less than what they claim.