🔔 Provider Focus - Atom Bank

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.

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.

The provider chosen this time is a new bank, Atom Bank, the first of a group of banks that are focusing on utilising digital technology, with the aim to make banking easier and more convenient.

Background Information

Atom Bank is the first in a new wave of digital-only banks that are looking to launch in the UK in the near future. This new breed of bank will attempt to shake up the industry, offering convenient banking by taking advantage of the increasing popularity of mobile and online banking. Atom is the UK’s first digital-only bank to have launched, having gained its Banking Licence from the Bank of England last year.  This month saw the launch of its first savings accounts, albeit to a limited number of customers, who pre-registered interest with the provider and are using the providers app.

The bank itself is based in Durham, in the North-East and was founded by Anthony Thomson, who was Chairman of Metro Bank, which was the first high street bank to be launched in over 100 years.

Atom Bank is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA). In addition, Atom 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

In April 2016, Atom Bank launched a 1 Year Fixed Saver paying 2.00% gross/AER and a 2 Year Fixed Rate Saver paying 2.20% gross/AER. Both interest rates are competitive, with the 1 year version market leading and the 2 year account matching the top rate on the market at the moment. The big drawback and the one that currently keeps the provider from entering our Best Buy Tables is that these accounts are only available to a limited group of savers.

At the moment, only those who pre-register interest with Atom Bank will be able to apply through its app for the accounts, however this is an encouraging start and hopefully when the accounts are made more widely available, they will still maintain their competitive edge.

The bank is also planning to introduce current accounts and instant access savings accounts, in addition to mortgages, loans and credit cards during 2016, so it will be interesting to see how these will fit into the various markets and we will, of course, let you know any interesting developments about their savings products as and when we get them.

Application Process and Customer Service

The key point to note about this provider is that it will be exclusively online and mobile based, so the bank will not have a branch presence. For those that have reservations about using online and digital channels for their banking, this provider therefore may not be suitable. As with any provider that relies heavily on technology, Atom Bank will be judged on the quality of its processes and the experience of those using the applications.

As it is early days and with a limited number of people being eligible, we do not have a huge amount of experience to draw upon, although our interactions with the provider so far have been positive.

If you are one of the select group that have applied for an account already and have successfully opened one, we would love to hear from you to find out more about your experiences – good or bad, 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 Atom Bank and other new or less well-known providers continue to drive competition in the savings market and offer some of the best rates available at the moment. 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.