Part of the savings landscape for many years now, Sharia-compliant savings accounts have become much more competitive and therefore far more visible in the last couple of years. Are you missing out?
In fact, today four out of the top five one year fixed term bonds are Sharia compliant. And when you consider there are currently only four Sharia-compliant banks currently offering retail savings products, you can assume if more come to the market, they might dominate the best buys altogether.
The products differ from mainstream savings accounts because they adhere to the strict ethical code of Sharia banking principles, so savers do not earn a rate of interest; instead they earn an expected profit rate on any funds deposited.
This means that the return is not guaranteed in the same way as it is on a fixed rate bond with a non Sharia compliant bank. However, these providers are keen to point out that to date they have always paid the returns expected.
More importantly however, the providers are fully authorised and regulated in the same way as other banks and building societies and are part of the UK Financial Services Compensation Scheme (FSCS). So, funds of up to £85,000 per person, per bank, are fully protected in the same way as funds deposited with your high street bank.
At the moment, the best fixed term rates on offer can be found on our Sharia Fixed Term Accounts best buy table. For example, BLME leads the way with its new one year fixed term account, paying 2.20% gross/AER. Compare this to the best one year fixed rate bond from non Sharia compliant provider Birmingham Midshires, which pays 2.00% gross/AER.
And for those who are yet to open an account via the Raisin UK Cash Savings Platform, the welcome bonus which is paid on the first eligible account that is opened and funded could change a competitive rate to a market leading one.
For example, the best one year account currently available via the Raisin UK marketplace is with Sharia-compliant provider, QIB UK, which is paying an expected profit rate of 2.05% gross/AER*. If you were to deposit £40,000, you could qualify for an £80 bonus – which would boost the amount earned to the equivalent of 2.25%.
For more information about the Raisin UK Cash Savings Platform, take a look at our Platform Provider Focus – or download our free guide to see details of the other Cash Savings Platforms that are available.
To learn more about Sharia compliant accounts, read our article – Sharia Compliant Savings.
If you need any further help with finding the accounts that are most suitable for your needs, take a look at our independent best buy tables or call us on 0800 011 9705 to speak to one of our expert savings specialists.
*We are occasionally paid by some providers if you click through from our Best Buy Tables and open a savings or current account with them. We will never accept a payment that compromises in any way our independent, whole of market approach to providing information on savings products. For clarity we will indicate those companies who remunerate us with an asterisk (*).
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