Would you invest with a lessor known bank for a higher rate interest?

anotherquestion

Hi folks,

Probably an often asked question but just wondering what is your take on investing with a lessor known bank such as below for a higher rate of  interest on an ISA.

Charter Savings Bank | Raisin UK 1 Year Fixed Term Deposit | Raisin UK

PAR001 - 1 Year Fixed Term Deposit - Raisin

Both links from moneysupermarket  and do seem to be form same company Raisin

Thanks for any advice.

refluxer

Yes, both Charter and Paragon are reputable banks and covered by the FSCS so I wouldn't have a problem saving with either of them to get a better rate. I've actually had a few different savings products with Paragon in recent years (including both fixed rate accounts and ISAs) and not had any problems.

I probably wouldn't save with either of them through Raisin through personally, based on what I've read about Raisin on this forum. The cashback they sometimes offer can be tempting for some, though.

If you check the MSE top savings tables, you'll see you can currently beat both of those rates by going with Secure Trust Bank or Investec instead.

None of these are ISAs though - were you aware you've posted in the ISA & Tax-free Savings sub-forum ?

Chloe_G

Yes, I''ve had Paragon and Charter accounts for several years - no problems  ... and I also use Raisin for some accounts.

Albermarle

The well known banks are almost always uncompetitive for savings accounts, so best to avoid them and go with the smaller ones . 

JGB1955

I've had savings accounts and/or ISAs with Charter, Paragon, OakNorth and Aldermore for several years.  Absolutely no problem and all FSCS protected.

anotherquestion

Thanks  for all replies, yes it's ISA I am on about here, so thanks to the poster for pointing out that my links are not ISA related.

I have decided to go with Virgin Money for another one year fixed ISA due to mature soon, its 1.51% but 1.76% if a customer has a current account with one of the related banks such as Clydesdale which I have just opened, to get the higher rate.

I know its probably  just me but I am a little wary of lessor  known banks even though FSCS protected.

Malchester

No probs with Paragon and Charter. Have used both in the past. Be careful with Raisin as nearly always a better rate can be found going direct to the bank as Raisin take their commission which affects the interest rate.

refluxer

anotherquestion said:

Thanks  for all replies, yes it's ISA I am on about here, so thanks to the poster for pointing out that my links are not ISA related.

I have decided to go with Virgin Money for another one year fixed ISA due to mature soon, its 1.51% but 1.76% if a customer has a current account with one of the related banks such as Clydesdale which I have just opened, to get the higher rate.

I know its probably  just me but I am a little wary of lessor  known banks even though FSCS protected.

I was cautious too initially, but your confidence in them will grow with experience. I dread to think of the amount I am down on over the years that I only stuck with the 'big' / high-street names.

All of the banks and building societies recommended on MSE have FSCS protection in case things go wrong, but you can always do your own research too and, for me, that also includes checking the forum for related threads on customers' experiences. The other thing to ensure is that you visit the official sites and/or download the official apps.

That enhanced Virgin Money rate is the best one-year fix currently available that I've heard of, although it may only be a matter of weeks before it's matched or beaten, based on the steadily increasing rates we've seen in the last few months. I think the next BoE base rate meeting is in June and further rate rises are anticipated this year. 

FWIW, smaller banks like Aldermore (who are currently top of the open-to-all 1 year fixed rate ISA table) are often more highly regarded then the likes of Virgin Money, despite Virgin being a bigger 'name'. Experiences will always be mixed though, whoever you choose.

adindas

anotherquestion said:

Hi folks,

Probably an often asked question but just wondering what is your take on investing with a lessor known bank such as below for a higher rate of  interest on an ISA.

Charter Savings Bank | Raisin UK 1 Year Fixed Term Deposit | Raisin UK

PAR001 - 1 Year Fixed Term Deposit - Raisin

Both links from moneysupermarket  and do seem to be form same company Raisin

Thanks for any advice.

A lot of people are doing that. Just look at the regular saving account sub-boards. Many people are doing RSA not even in a bank but Building Society which is smaller than a bank. What is important to see is that whether they are  covered by FSCS.

.

Olinda99

A bit pedantic, but maybe use the word 'save' rather than invest - unless you are talking about buying shares in those banks.

eskbanker

anotherquestion said:

I know its probably  just me but I am a little wary of lessor  known banks even though FSCS protected.

It's not just you - MSE went through a phase of listing the best-paying savings accounts in its main savings article, and below the best rates would show the most competitive one available from familiar names, labelled as "Top 'Big Brand' savings. It's a 'name you know', but you sacrifice a lot on rate here", but stopped catering to that mentality and focuses solely on rates now.