Who is Raisin UK?
Shopping around for the best savings rates can be tiresome. Comparison websites may only show deals that provide kickbacks, while some of the best rates are from more obscure providers you may never have heard of.
Rather than searching the websites of every bank and building society in the UK, startup Raisin UK* provides an innovative and simple solution. Raisin UK offers savers access to top savings rates through its own website, with just one sign-up needed. It saves users search time as well as the laborious process of completing registration forms.
Raisin UK brings years of experience in the savings market, having already operated and attracted more than 1,000,000 users across Europe, which lets savers access top rates from European banks. Raisin UK entered the UK market in March 2018 with the purchase of a similar offering called PBF Solutions, which was founded by Kevin Mountford. He brings a strong pedigree in the market, having been the head of banking at comparison website MoneySuperMarket.
As well as being popular among savers - with more than €53bn of deposits - Raisin UK has raised more than €206m across investors such as PayPal, Thrive Capital, Index Ventures, and Ribbit Capital.
How does Raisin UK work?
Traditionally, when you apply for a savings account, you need to complete several web pages to enter your personal details and account information. This can be frustrating and time-consuming if you want to open several accounts in different places. Raisin UK aims to remove the hassle and make the signing-up process more efficient.
Raisin UK's registration page is pretty slick, with just one webpage asking for your personal details such as your name, address, and national insurance number to verify your identity, as well as your income and a linked bank account. Users are signed up to the services of ClearBank (via a Raisin UK Account) when they register in order to manage money transfers to savings accounts on the Raisin UK marketplace under a partnership between the brands.
This is the last time you have to have your ID confirmed as Raisin UK has automatically verified you on behalf of any of the partner banks it chooses. Raisin UK may ask for further documents to prove your identity if needed. Once registered, you can immediately start applying for a range of savings products from its partner banks through the Raisin UK marketplace online, using just one single login and password rather than having to remember multiple ones.
You have the option of applying for a range of products, including Fixed Term Bonds, Easy Access, and Notice accounts.
You can set how much you want to deposit and choose from different savings terms ranging from zero to five years. Each product displays information on deposit protection, how much you can earn, and how the provider is owned and regulated. Raisin UK does not offer joint accounts.
What products does Raisin UK offer?
Savers can access products on the Raisin UK marketplace solely from its partner banks. It doesn’t just focus on the big UK brand names but promises to provide secure savings products regardless of where the bank was founded.
It currently has partnerships with around 30 banks in the UK market, with more on the way. There are products from providers such as Aldermore, BNF Bank, Birmingham Bank, Charter Savings Bank, ICICI Bank and QIB (the UK wing of the Qatar Islamic Bank).
The rates on offer are designed exclusively for Raisin UK users and QIB (UK) products are Sharia-compliant for those worried about the ethical standards of their savings provider. You can also sign up for alerts to inform you when new rates are available.
Does Raisin UK offer the best savings rates in UK?
Raisin UK is pretty careful with its wording when it comes to the rates you can get on its marketplace. It describes them as competitive, but they are not necessarily the best. The highest rate on offer on the Raisin UK marketplace is currently 6.12% from Al Rayan Bank, however, that rate is for a 12-month fixed-rate bond so you are only guaranteed that rate for 1 year.
If you are looking to get a good rate of interest over a longer period then Raisin UK is currently offering a rate of 5.80%, through Zenith, however, you'll need to lock your money away for 3 years. Raisin UK also offers a rate of 5.90% through Zenith on a 2-year fixed-rate bond.
If you're looking to assess Raisin UK's rates, they have a handy calculator on their website. All these rates may change regularly, however, on both Raisin UK and elsewhere, so it is still worth keeping an eye on comparison websites rather than just relying on one source.
Pros and Cons of Raisin UK
Rates are one of the biggest factors when choosing a savings account, but you also can’t put a price on convenience.
Raisin UK lets you access multiple accounts in one place, you only have to remember one login and sign-in once, and there is also the option of Sharia-compliant savings. Additionally, it will alert you if any savings rates improve from its partners, so you should never miss out on a decent deal. This may in some cases make it worth considering even if the rates are a few percentage points off of the best buys.
Raisin UK also provides access to providers beyond the UK shores, which technically should help widen your scope for higher rates by considering banks on the continent. However, most UK banks already tend to offer higher rates, plus you need to ensure you are familiar with different deposit levels and tax rules when using an overseas bank.
You are also limited by the partners that Raisin UK signs up with and the unique deals they offer, which may be competitive, but you still need to shop around to ensure they are actually the best.
Another downside is the fact that all of its products are still tax-liable, although Raisin UK states that less than 5% of UK savers will actually end up paying interest on the savings they earn. Basic rate taxpayers can earn up to £1,000 per year tax-free, but for higher rate (40%) taxpayers, it’s only £500.
Is Raisin UK safe?
Raisin UK is directly regulated by the Financial Conduct Authority. This means it has to follow rules on separating and protecting client money, so it isn’t mixed with its own funds.
All of the partner banks featured on the Raisin UK marketplace are either UK-based with deposits covered by the FSCS up to £85,000, or they are registered in a European country, where you will be covered under the European Deposit Guarantee Scheme (DGS) for the equivalent of €100,000.
These protections only apply per provider, so Raisin UK will also inform users if their funds are going into deposits with brands that are part of the same banking group as anything above £85,000 would not have as much protection, as technically it would fall under just one regulatory licence.
How does Raisin UK make money?
Raisin doesn’t charge any fees for its service. It makes money by introducing depositors to its partner banks. The amount it receives from the partner banks depends on how much you deposit and the duration of your savings product.
Raisin UK Alternatives
Cash management services are still a relatively new phenomenon.
DIY investing giant Hargreaves Lansdown entered the market in September 2018, currently offering rates up to 5.80% through its Active Savings product and without any service fees for users.
Hargreaves Lansdown has a similar range of providers and has accounts from Investec, Paragon Bank, Coventry Building Society, Kent Reliance and ICICI Bank. Similarly to Raisin UK, everything can be set up in one place and Hargreaves Lansdown will let you set up savings alerts.
Alternatively, there are apps such as Moneybox, which round up the spare change from your spending and puts it into an investment portfolio that can be held in an ISA.
Summary
Raisin UK* makes the process of saving more convenient with a single login to access multiple accounts. Managing multiple accounts from one place is helpful in the fast-paced world we live in and will benefit those looking for an efficient way to get more from their money and access some of the best savings rates in the market. But you are restricted to the partner's Raisin UK chooses, and there are no tax-free saving options, so this is the trade-off for the convenience Raisin UK offers.
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