The Bank of England has not given savers much cause for cheer, yet Co-op Bank, the ethical bank, is increasing rates on all of its fixed term savings products.
From today the bank has increased rates for new customers by up to 0.55 percentage points.
Co-op Bank, which has a “customer-led” ethical policy, will offer new customers who take out one-year bonds will earn 1.15 per cent, up from a current rate of 0.65 per cent; two-year bond customers will receive 1.3 per cent, up from 0.75 per cent and three-year bond holders will now receive 1.45 per cent, up from 0.9 per cent.
Existing customers will receive an increase of up to 0.6 percentage points. One-year bond holders will see a rise from 0.65 per cent to 1.25 per cent; two-year customers’ rates will increase from 0.75 per cent to 1.34 per cent and three-year rates will go up from 0.9 per cent to 1.5 per cent.
Andrew Hagger, director of Moneycomms, said: “This is a big increase from Co-op. These rates are decent for a high street bank but still well off the pace compared with some of the niche players in the fixed rate savings market.
Over one year, Co-op offers 1.15 per cent but you can get 1.9 per cent with Milestone Savings (Sharia compliant) and 1.8 per cent with United Trust Bank.
The best buy over two years is from Paragon Bank, at 2.11 per cent, compared to Co-op’s 1.3 per cent two-year rate.
And over three years, Co-op’s 1.45 per cent is beaten by the 2.31 per cent on offer from RCI Bank, 2.3 per cent from Vanquis Bank and 2.25 per cent from Tandem.”
Stuart Beattie, Head of Savings at The Co-op Bank said: “Ethically-minded savers looking for a competitive savings product can be assured that by choosing a fixed rate bond with The Co-op Bank they are choosing a bank that will support causes that are in line with the commitments of our Ethical Policy. We’re also further rewarding our loyal existing customers who have maturing fixed rate bonds with preferential rates should they choose to reinvest their savings with us.
“Our values and ethics govern how we operate as a bank and we ensure that savers get a competitive return on their money as well as supporting good causes; such as those that protect the environment and those that promote social and economic growth in Britain.“Our customer-led ethical policy has been shaped by more than 320,000 customer and colleague viewpoints over 25 years.”
The Co-op’s ethical approach
The Co-op Bank is the only UK high street bank with a customer led Ethical Policy that is part of the Articles of Association of the bank; meaning it is committed to operating in line with the values and ethics it shares with its customers.
In the last five years the Bank declined banking services to 30 organisations that were in conflict with the Ethical Policy, with conflicts relating to human rights; equality, oppressive regimes, fossil fuel extraction and production, and animal welfare. The Bank also provided a wide range of bespoke banking services for charities, community groups, voluntary organisations and social enterprises, who share our co-operative values and lent £40mn to this sector last year.