Atom Bank launches market-leading savings rates, is it time to switch?

24 February 2017

Atom Bank has increased interest rates for new customers across its range of savings products, although you need to have a smartphone in order to access its deals.

From today (Friday 24 February 2017), the rates on its fixed savings accounts are changing as follows:

  • One-year fixed saver, 2% AER up from 1.5%
  • Two-year fixed saver, 2.1% AER up from 1.65%
  • Three-year fixed saver, 2.2% AER up from 1.75%
  • Five-year fixed saver, 2.4% AER up from 2.05%

Account holders can choose to have interest paid monthly or on an annual basis. However, you must own an Android or Apple smartphone and use the Atom Bank app to open and manage your account.

The bank is based in the UK and savers have the full Financial Services Compensation Scheme protection of £85,000 in the event of a bank failure.

Clare Framrose, Atom Bank head of customer proposition, says: “Savers have had a tough deal with traditional banks, and we are determined to offer something better.

“We are absolutely delighted to offer a wider and more competitive range of fixed savers. We truly believe in giving customers the best products and experience we can, without the pain and frustration you can get with traditional providers.”

Moneywise verdict

If you’re comfortable with banking solely using your smartphone then these savings rates are head and shoulders above the rest. Here are the next best deals being offered:

  • One-year fixed: 1.65% from Charter Savings Bank
  • Two year fixed: 1.75% from Charter Savings Bank
  • Three-year fixed: 1.85% from Charter Savings Bank
  • Five-year fixed: 2.2% from Secure Trust Bank

All of Atom’s rates are also higher than the equivalent cash Isa. Plus, while there are tax benefits associated with saving in an Isa most people can now earn up to £1,000 in interest from any source before tax needs to be paid.

Many savers are also turning to current accounts in order to get more from their money. Rates are as high as 5% but in most cases you can only earn interest on balances of a few thousand pounds. See our guide to the week’s best current accounts.

Even if you don’t take this deal from Atom Bank, the big hope for savers is that increased competition will drive up rates across the market from their current levels.

You can search today’s best savings and cash Isa rates using the Moneywise product comparison tool.

Add new comment