Allica Bank offers 5% cash savings fixed rate bond
Cash savings is an increasingly competitive market for customers as rising interest rates prompt challengers such as Allica and others to gain ground on large incumbent banks.
Fintech SME challenger bank Allica has launched a 12-month fixed rate bond paying 5 per cent.
Allica, however, has a £10,000 minimum threshold with up to £250,000 available per customer.
While a bond, the fixed rate account is treated in the same manner as cash savings or deposits in terms of consumer protections to £85,000 under the Financial Services Compensation Scheme.
The move is the latest from a neobank or fintech being increasingly competitive for customers’ cash savings. Chip,Kroo and Monzo have all been upping their rates as a response to moves by the Bank of England to increase interest rates over the past 18 months, up to 4.5 per cent last week.
Chase, JP Morgan's own digital bank has also been actively using competitive rates as a way to acquire new customers away from traditional banking incumbents.