Metro Bank now offers best easy-access AND one-year savings fix: Is it a safe home for your cash?

For the first time, Metro Bank is offering two savings accounts that are right at the top of the best buy tables.

The big bank – which last month secured a lifeline to shore up its finances – now has one easily accessible account with a rate of 5.22 percent and a one-year interest rate fixing of 5.91 percent.

Normally, Metro has never topped the independent This is Money best buy tables since it was founded in 2010.

But a savings expert says the “aggressive pricing” of Metro Bank’s best buy accounts suggests the bank is trying to capture cash deposits from private and business savers. This comes after customer deposits fell by 5 percent in the third quarter.

The one-year fixed rate account has been launched at a time when fixed rates are being cut left, right and centre.

Meanwhile, Metro Bank’s easy-access account rate shot up from a paltry 1.65 percent. The account is described as ‘limited edition’.

It requires a balance of £500 and after a year it returns to the standard variable rate of 1.65 per cent.

The last time Metro Bank had a one-year fixed bond in the best buy tables was in October 2019, according to interest rate controller Moneyfacts.

Since Moneyfacts’ administration at Metro Bank began in 2011, the bank has not had an easily accessible account appearing in the best buy tables until now.

Shares of Metro Bank fell in October on reports that the bank was seeking large sums of cash in an effort to shore up its ailing balance sheet.

The bank managed to secure a £925m lifeline, which included the sale of £150m of new shares, as well as £175m of new debt on top of a £600m refinancing of existing loans.

Earlier this month, Metro Bank admitted that depositors rushed to withdraw money from their accounts due to fears about the future before an emergency fundraising campaign last month, but withdrawals returned to “more normal levels” shortly afterwards.

According to Savings Guru, the bank currently manages £14.5 billion in savings.

Andrew Hagger, founder of personal finance website MoneyComms, said: ‘Last month Metro Bank raised £325 million in new funding as well as refinanced £600 million of debt and the bank is currently operating normally.

‘The recent aggressive account pricing suggests that Metro is now targeting private and business savers to raise money through that route by offering the best purchase rates.

‘These accounts can be opened online, which increases their appeal among savers.

In the business savings market, Metro Bank offers a 4 percent easy-access account and a 5.52 percent fixed-rate bond – again the best bargains.

These business savings products must be opened in an office.

Anna Bowes believes that after the outflow, the bank will try to replace it in some way.

She says: ‘It’s been a while since Metro Bank was last on the best buy tables, so it’s clear the bank wants to raise money from savers for some reason.

‘They may have seen an outflow after the recent issues that they want to replace, but it is good news for savers and keeps competition alive in the savings market.’

Is your money safe?

On whether savers’ hard-earned savings are safe in one of Metro Bank’s best buy accounts – Hagger says: ‘Customer balances up to £85,000 are covered by the Financial Services Compensation Scheme, which guarantees that if a bank or building society goes bust its depositors protected up to that level (£170,000 for joint accounts).

Anna Bowes added: ‘It’s understandable that some may be reluctant to deposit money into the bank because of the issues, but what you need to remember is that as long as your deposits are within the FSCS limit of £85,000 per person, your money is safe even in the unlikely event that the worst-case scenario would occur.’