The sheer number of non-high street banks is overwhelming...

NoMoneyNoWorries

Who are all these banks.
Building Societies I understand ( every town used to have have its own BS) --BUT..
looking up Best ISAs, Fixed Rates, etc so many banks I have never heard of.
Also their rates are invariably worse  than the high street banks.
Are they  trustworthy or only for the rich and tax dodgers (a lot of them  appear to be not UK)

jaypers

Many are trying to get a slice of the action, be it loans, mortgages, savings etc. Important thing is to ensure that they are FSCS protected, in which case you are fine to deal with them if you like the look of a product. Never keep more than £85k per person in savings with any one institution (£170k for a couple). You can do a basic check here - https://www.fscs.org.uk/check/check-your-money-is-protected/

Rheumatoid

NoMoneyNoWorries said:

Who are all these banks.
Building Societies I understand ( every town used to have have its own BS) --BUT..
looking up Best ISAs, Fixed Rates, etc so many banks I have never heard of.
Also their rates are invariably worse  than the high street banks.
Are they  trustworthy or only for the rich and tax dodgers (a lot of them  appear to be not UK)

The high street banks are usually guilty of the worst rates.

Aretnap

NoMoneyNoWorries said:

Who are all these banks.
Building Societies I understand ( every town used to have have its own BS) --BUT..
looking up Best ISAs, Fixed Rates, etc so many banks I have never heard of.
Also their rates are invariably worse  than the high street banks.
Are they  trustworthy or only for the rich and tax dodgers (a lot of them  appear to be not UK)

If your looking at the best buy tables why are you even noticing the ones with bad rates?

Technology means that there's no need for banks to have a physical presence on the high street any more, which means it's easier than it once was for new banks to start up, without the need to build up a nationwide network of branches, no need for a local bank or building society to serve only one town etc. It does mean that if your notion of a bank is a building in your local high street then your less likely to have heard of the new ones. But more choice means more competition which means better rates, so it is a Good Thing for the consumer.

Of course unless you go into a city centre you are unlikely to see many branches of Nat West or Barclays these days, so I would not be surprised if it was only old people who had a clearly defined idea of what a "high street bank" is in the first place.

As above provided the bank has FSCS protection and you are not saving more than £85K they are all equally safe. Standards of customer service may vary, however a savings account (as opposed to a current account) is a very simple product for which you'll almost never have a need to contact customer services, so that's never been a major factor when I've chosen savings accounts.

Albermarle

NoMoneyNoWorries said:

Who are all these banks.
Building Societies I understand ( every town used to have have its own BS) --BUT..
looking up Best ISAs, Fixed Rates, etc so many banks I have never heard of.
Also their rates are invariably worse  than the high street banks.
Are they  trustworthy or only for the rich and tax dodgers (a lot of them  appear to be not UK)

Presume you meant to say invariably better ( not worse) .
If I look at the Moneyfacts comparison site for one year fixed rate, the first 20 include no big banks at all, and only one small building society.

Some of them are offshoots of foreign banks ( registered in UK ) whilst some are smaller UK banks that lend money out for car finance, small businesses, BTL mortgages etc . and take savings in to finance the loans. Which is a banks function.

masonic

Established high street banks have a higher cost base than smaller internet-only banks. They also normally have shareholders wanting to see a profit margin and return on their investment, whereas its acceptable for newer banks to make losses for many years as they grow their market share. Aside from "gimmick" accounts that pay interest on limited balances, it would be expected that high street banks wouldn't be at the top of the rate tables, and generally are not. If the best rates were available from high street banks, the smaller challenger banks wouldn't get a look in.

TheWoodler

There are several types of financial institution, and it makes it easier to understand who they are when you break them down into sectors. 

The important thing to remember is that to offer retail banking to the consumer, a bank must obtain a full banking licence in the UK and be fully regulated - you can’t just set up a bank and offer products, it has to go through a regulatory process. That includes the FSCS protection.

Online and app-based banking and the corresponding rise in social media has been the biggest factor, I think, in extending the potential customer reach of even quite small institutions - in provision of facility and the ability to reach customers via eg MSE and other tables and sites such as Moneyfacts. 

It makes sense that providing online facilities allows small BS to attract customers and deposits beyond their traditional local base, while still playing to their High Street presence. 

Turning to foreign banks, some, like Chase and Marcus by Goldman Sachs, are well-established in the US and have offered disruptive market-leading rates to break into the UK market, but that’s not necessarily a sustainable approach. 

Elsewhere, banks such as JN Bank and Union Bank of India, currently table-topping, reflect Britain’s multicultural society and the links that significant communities have with banks in their country of origin. Of course there is demand and a natural customer base there, but again, they now have an opportunity to extend their customer base to a wider public.

This is also seen in the rise of sharia-compliant banking, with mainstream banks having sharia products, and specialist banks, both foreign and British-owned, emerging in the sector, eg Al Rayan and the British Gatehouse bank. You do not have to be Muslim to bank or save with these organisations, and the ethics of Islamic banking are attractive in terms of what they invest in (no alcohol, gambling etc).

Ethical banking is becoming increasingly important, though still a relatively minor player in the sector, but that’s changing. Gatehouse offer a Woodland Saver with tree-planting per product, and many BS offer green or charity affiliate products (sometimes with lower rates but a good trade-off if it’s something you want to support). Big players such as Coventry BS are going for B Corp endorsement and smaller players such as Melton BS the FairLife Mark for fair trading. Even NS&I offer a competitive Green Bond at the moment.

There are also specialist green BS (Ecology) and banks (eg Tandem, which is app-only). 

Many others have gone into a retail banking offer as a natural extension of their specialist financing activity. Ford Money is one, and many of the other regular names that crop up here such as Cynergy, United Trust Bank etc have their origins in specialist sectors, as does Oxbury Bank, specialising in agricultural banking.

Then there are the challenger or neobanks, primarily app-based, eg Atom, based in Durham, Tandem and Oxbury - a bank can be both specialist and neo! It’s worth reading altfi.com for an understanding not only of challenger banks, but also of how new technologies such as Open Banking work. 

All are FSCS-protected. You might want to look at other factors that are important to YOU when deciding where to save. Do you want ethical banking? Social responsibility? Good customer service? Accessibility?

Unlike Aretnap I do look for good CS in tandem with accessibility because I’m deaf, and if I have a query or run into an issue, such as an ISA transfer, I want to ensure I don’t spend hours on the phone tying up myself and my OH, but can contact the firm by web chat, secure message or email and receive a timely response that puts me on a par with people who can phone up. In-app chat with Atom and First Direct has been brilliant, for example, and Barclays too for my CA. Smaller BS don’t always have a good idea of accessibility beyond website compliance, which is only part of the picture - the major high street names do lead there - but their CS and flexibility have often saved the day. 

The moral of the story is that I find it interesting to explore the banking landscape, and put my money in non high-street names that make it easy for me to save and to contact them, benefit from good rates, and which as far as possible align with my needs, beliefs and values. 

It’s all part of a package, as far as I’m concerned, it’s interesting, educational and fun, and if it has FSCS protection, and you qualify for the minimum threshold (some as little as £1) and Ts and Cs of the account you’re applying for - then there’s no barrier to accessing savings that meet your needs in a diverse banking marketplace. 

Olinda99

didn't know there were any high street banks anymore thought they'd all left...

GeoffTF

Olinda99 said:

didn't know there were any high street banks anymore thought they'd all left...

There are still lots of banks and building societies in he city where I live.

Albermarle

Ethical banking is becoming increasingly important, though still a relatively minor player in the sector, but that’s changing. Gatehouse offer a Woodland Saver with tree-planting per product, and many BS offer green or charity affiliate products (sometimes with lower rates but a good trade-off if it’s something you want to support). Big players such as Coventry BS are going for B Corp endorsement and smaller players such as Melton BS the FairLife Mark for fair trading. Even NS&I offer a competitive Green Bond at the moment.

There are also specialist green BS (Ecology) and banks (eg Tandem, which is app-only). 

You missed out Triodos, who were offering ethical banking before most people had ever heard of it ( first established in 1968) 

TheWoodler

So I did, but that was a deliberate omission - they’re a better-known name in that market for that very reason, and they don’t usually offer table-topping rates. 

As per the bank’s published history on their UK and NL websites, the ideas behind Triodos emerged in 1968, followed by a Foundation in 1971, but the bank itself doesn’t seem to have been founded until 1980. They’ve been in the UK since 1995.