Raisin: does it offer the best interest rates and security for your savings?
The new savings comparison site lets you compare and manage fixed-rate accounts through the site – with the added incentive of £50 cashback for signing up. We look at how its rates, convenience and security stack up.
Finding the best home for your savings can be a surprisingly difficult process.
Not only do you have to find the best rate, you have to fill in a long application form, often followed by a demand for ID verification.
For savers with big pots, this money often has to be spread around, meaning multiple applications.
For those who hate all the hassle, Raisin is an interesting new proposition.
What is it?
Effectively, it's a hybrid between a price comparison site and a money management tool.
You can choose from a variety of fixed-rate bonds ranging from one to five years (sadly, easy-access accounts aren't offered).
Unlike traditional comparison sites, it allows you to register, apply for and manage all your savings accounts through Raisin’s site.
Plus, it’s offering a launch bonus of £50 for customers who sign up.
So should you be making Raisin the next home for your savings? Potentially. It's a nifty proposition – and bonus cash is never a bad thing – but it has its drawbacks, most notably that it doesn't offer whole-of-market comparison.
In this article, we take a detailed look at its interest rates, how it works and whether it’s secure to help you decide whether it's worth going for.
Compare savings accounts on loveMONEY’s comparison site
Has Raisin got the highest rate?
As we just mentioned, Raisin hasn’t got every savings account in the market.
In fact, it currently only has five banks on board, of which only three at the time of writing offered products: AgriBank, Gatehouse Bank and ICICI Bank. Raisin say that more banks will be added in the coming months.
The good news is Gatehouse Bank has recently had the best, or close to the best interest rates in the market (although, as a Shariah-compliant bank, this is an expected return).
At the time of writing, Gatehouse Bank’s one-year fixed term deposit on Raisin paid 2%, just behind Atom Bank’s market-leading 2.05% rate, which isn’t on Raisin.
That works out as a difference of just 50p if you deposited £1,000 and left it for a year.
Even with a much bigger deposit, Raisin’s £50 launch bonus will beat the extra interest you could earn elsewhere.
We can’t guarantee, of course, that Raisin will continue having banks with competitive rates. However, given that the rates are all fixed, you could always move your money at the end of the account term.
All of Raisin’s interest rates can be beaten by a handful of Regular Savings Accounts – find more about these here.
Is Raisin convenient?
Raisin allows you to apply for and manage accounts through its website, although you can still use the website of its partner banks using your log-in.
Although fixed-term deposits don’t require much management, being able to see all your accounts in one place still has an advantage for savers of larger amounts.
If you’re saving more than £85,000, for instance, for it to be protected by the FSCS you’ll need to spread it around several banks and Raisin could make this much quicker and easier.
Raisin also contacts savers when their fixed-term deposits mature to ask whether they want to take out another savings product or withdraw the money into their current account.
Other savings sites like Octopus Cash go a step further in offering to reinvest your money for you at the end of fixed deposit terms. However, the rates it offered weren’t as high as Raisin’s when we looked.
Keep in mind that, thanks to open banking, it could soon be possible to see all your accounts through your main bank, without having to use Raisin.
HSBC customers can already use the bank’s Connected Money App, which lists all their bank accounts, credit cards, mortgages and loans, including non-HSBC products.
Is Raisin secure?
Having all your savings in one place does carry a security risk.
However, funds can only be moved from the savings account back into your nominated account, so even if crooks got access, they wouldn’t be able to steal your money.
The UK banks on Raisin’s platform are all covered by FSCS protection up to £85,000. Raisin includes one non-UK bank, AgriBank of Malta, although this is covered by an equivalent Maltese scheme up to €100,000 or its Sterling equivalent.
The FSCS £85,000 limit is per bank, so if you have more than that over several accounts with the same bank, you could be at risk. Read more about the FSCS here.
Compare savings accounts on loveMONEY’s comparison site
How to get the £50 bonus
To get the bonus, you simply register with Raisin (which takes 5 minutes), apply and deposit money into one of its accounts.
You then email bonus@raisin.co.uk within 30 days using the email address you registered with, including your name and “Launch Bonus” in the subject line. The money will be credited into your current account within 60 days.
Bear in mind that the minimum deposit for the banks currently on Raisin is £1,000 and you will be locking your money away for at least one year.
Several banks offer cash for switching to their current accounts, although this can involve a credit check and far more paperwork than applying for a savings account.
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