We are often asked for more information on various savings providers that are less well-known or new to the savings market. In this regular series of articles, we aim to turn the spotlight on these providers to give you more information about their background and history and why they are of particular interest in today’s savings market.
Alongside these articles, you may also find our Guide to Challenger Banks useful for more information on some of the banks that are seeking to break the monopoly of the big high street names.
The provider chosen this time is OakNorth Bank, as they entered the cash ISA market for the first time last week. We hope that you find this information useful and as always, if you have any feedback or suggestions as to who should appear in a future article, please let us know.
Background Information
OakNorth Bank is a UK-based bank which specialises in lending to small and mid-sized businesses and entrepreneurs and also provides property finance and savings accounts. By saving with the provider, OakNorth Bank states that you are supporting UK growth businesses in addition to the returns you receive.
OakNorth Bank was founded by entrepreneurs Rishi Khosla and Joel Perlman, securing a full banking licence in March 2015 and then commencing operations in September 2015. The bank has offices in London and Manchester.
OakNorth Bank is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA). In addition, OakNorth Bank is a member of the Financial Services Compensation Scheme (FSCS), so funds placed with the provider would be covered up to £85,000 per person, should the provider go out of business.
For more information on the FSCS, please take a look at our handy guide or call us on 0800 321 3581 to speak to one of our expert savings advisers.
Today’s Savings Market
OakNorth Bank mainly focused on Fixed Term Deposit savings accounts at launch, but has since branched out into other areas of the savings market.
Interestingly, OakNorth Bank features regularly in our fixed rate bond best buy table, but the rates vary in terms of competitiveness at any given time. At the time of writing, just the 12 Month Fixed Term Deposit appears in our Fixed Rate Bond Best Buy Tables.
The provider also offers a range of variable rate accounts, which pay fairly competitive rates, but don’t currently trouble the top five in our easy access and notice account best buy tables.
As mentioned earlier, the provider has now taken its first steps into the cash ISA market – a rare but welcome move from one of the newer banks.
On offer currently is an easy access cash ISA paying 1.05% tax free/AER, which sits just outside the top 5. Also not far behind the market leaders is the provider’s 12 Month Fixed Rate Cash ISA, paying 1.35% tax free/AER.
To see how OakNorth Bank’s accounts compare to the rest of the market, take a look at our independent best buy tables or call us on 0800 321 3581.
Application Process and Customer Service
You can apply for all accounts offered by OakNorth Bank online only, with a minimum deposit of £1,000.
Interestingly, the new cash ISAs are classed as ‘Portfolio ISAs’, so you can open more than one type of cash ISA with the provider (e.g. fixed and easy access) in the same tax year. Transfers in from previous cash ISAs are also accepted into the accounts by the provider.
The application process is clear and straightforward and the feedback so far from our Concierge department has been positive.
We certainly have not been made aware of many negative experiences so far from any of our clients or from our own dealings with the provider. Of course, as mentioned earlier, your thoughts and experiences about providers’ customer service are invaluable for us, so please get in touch to share any feedback you have.
A final word…
It is tempting to stick to the well-known brands when it comes to savings accounts, but in doing so, you may be missing out on some of the best rates on the market. Whilst there are some exceptions, for example High Interest Current Accounts, you can no longer rely on the larger brands and high street names to offer the best interest rates. Providers like OakNorth Bank and other less well-known providers continue to drive competition in the savings market. The best strategy is to look at all options and take each provider on its own merits, considering alternative providers to get the best returns for your money. As long as you do your research (or ask us for more information!) and are comfortable with the provider, there is no reason not to consider them in future.
As mentioned earlier, if there is a provider that you would like to see featured in a future article, please let us know. We are also keen to hear from you if you have any feedback about any provider’s customer service, good or bad! Please contact us at [email protected] to share your experiences.
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