What is Gatehouse Bank? Shariah-compliant firm has best savings rates but is little-known

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For the past decade, the independent This is Money best buy tables have been dominated by challenger banks – many of which are not household names.

Savers who have been keeping a close eye on the best rates lately may have noticed one provider in particular.

Gatehouse Bank currently offers top returns in the fixed-rate savings market.

The bank is home to the best paying fixed rate deal currently available. The five-year deal pays 5.1 percent interest.

It also offers the joint best solution for a year and pays 4.5 percent; the top two-year fix pays 4.8 percent and the market-leading three-year fix pays 5 percent.

Savers can apply directly via Gatehouse Bank’s website or via the savings platform Raisin UK.*

Gatehouse also offers highly competitive Isa cash rates, all of which are currently featured on our Best Buy Isa tables.

However, high savings rates aren’t the only reason savers might want to take another look at this little-known bank.

We answer some frequently asked questions about the bank, including how many customers it has and what “shariah-compliant” actually means.

What is Gatehouse Bank and how many people use it?

Gatehouse is a Sharia compliant challenger bank founded in 2007 with offices in London, Milton Keynes and Wilmslow, Cheshire.

It is part of the Gatehouse Financial Group of companies and is authorized by the Prudential Regulation Authority and regulated by the PRA and the Financial Conduct Authority.

In addition to savings products, the bank offers a range of services, including financing for home purchases and buy-to-let’s.

It has also invested in three build-to-rent property companies since November 2014, financing thousands of new homes in the UK.

At the end of 2021, the bank had more than 19,500 savers who together held more than £715 million in savings accounts.

While far from a household name, Gatehouse has achieved some significant milestones this year.

The bank received its first investment grade rating from credit rating agency Moody’s. In addition, it exceeded £1 billion in funded assets for the first time.

It also launched its first mobile app for savers, which This is Money tried and tested earlier this year, calling it one of our favorite savings apps in the process.

What’s behind his “ethical” claims?

In addition to offering a range of market-leading deals, Gatehouse profiles itself as an ‘ethical’ choice for savers.

It was named the ‘Best Ethical Savings Provider’ in the Moneynet.co.uk personal finance awards in 2022 for the third year in a row.

This is partly because it offers a range of fixed-rate and fixed-rate Isas offerings designed to help grow forests in the UK.

For each of these opened or extended accounts, the bank promises to plant one tree. This year, it planted its 15,000th tree on behalf of customers.

What does Sharia law mean?

As a Shariah-compliant bank, Gatehouse follows the laws and regulations of Islam and is guided by the Islamic economy.

The main Islamic principles include not charging interest to borrow money and not paying interest on savings accounts.

Therefore, instead of stating interest rates, Sharia savings accounts indicate how much profit savers earn through an “expected profit” – although the outcome is the same for savers.

Money invested in a Sharia bank cannot be used to fund businesses that cause harm, such as alcohol, tobacco, or gambling.

Like any other fully authorized and regulated UK bank, deposits at Gatehouse are supported by the Financial Services Compensation Scheme.

This means cash savings are guaranteed up to £85,000 per person or up to £170,000 in the case of joint accounts.

Ravi Kumar, senior product and proposition manager at Gatehouse Bank said: “We are working hard to raise awareness of Shariah-compliant finance and raise awareness of Gatehouse.

“This includes changing misconceptions about sharia-compliant finance, as our products are available to everyone, of all religions and none.

“There’s no question that we have more work to do to make sure savers understand what a sharia complaint means and how our approach and terminology differs from conventional banks.”

However, according to Kumar, it is the same sharia principles combined with its green focus and high savings rates that set it apart from other savings providers.

“We strive to be an ethical bank and are one of the few UK Sharia-compliant banks,” says Kumar.

“We then don’t invest in industries deemed harmful to society, such as weapons, tobacco or gambling.

“We want to offer competitive and innovative products, such as the Woodland Saver accounts, which plant a tree for every account opened or renewed.

“The relationship we have with our savers is also a testament to our competitive products and quality customer service.”