Oxbury Bank opens its doors to savers with competitive rates

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Piggy bank: Oxbury Bank plans to use savers


Britain’s first bank in 100 years to lend money solely to farmers has opened its doors to everyday savers with a range of competitive deals, This is Money can reveal.

Cheshire-based Oxbury Bank, which obtained its banking licence in January 2020, will pay savers 0.58 per cent on a 95-day notice account, the third-best rate available, and between 0.56 per cent and 1.17 per cent on a range of fixed-rate bonds lasting between one and five years.

Although none of the fixed-rates are best buys, they all feature towards the top of the independent This is Money best buy tables.

The 12-month tie-up paying 0.56 per cent on £1,000 or more ranks fourth among interest-paying accounts. All deposits are guaranteed by the Financial Services Compensation Scheme up to £85,000.

Piggy bank: Oxbury Bank plans to use savers’ money to back British farmers

The bank plans to use savers’ money to back British farmers and offers a range of business savings accounts and loans to agricultural businesses. 

The bank’s own backers include the Duke of Westminster, Hugh Grosvenor, who is a shareholder through his investment firm Wheatsheaf Group. Wheatsheaf participated in the bank’s latest fundraising round, reported last month, which injected £15million into the business.

The first agricultural bank launched since 1928, Oxbury has received enquiries from farming businesses for loans worth over £100million, This is Money understands. 

It employs around 65 staff and is aiming for a balance sheet of £1billion within five years and a 5 per cent share of the farm lending market by 2025.

It offers loans of between £25,000 and £5million to firms with terms of between six and 25 years and revolving ‘farm credit’ open to dairy farmers with 100 cows or arable farmers with 250 acres or more.

Farm lending is dominated by Britain’s big four banks, with Lloyds Bank the biggest player in the sector.  

Among Oxbury's backers is the Duke of Westminster, Hugh Grosvenor, who is a shareholder through his investment firm

Among Oxbury’s backers is the Duke of Westminster, Hugh Grosvenor, who is a shareholder through his investment firm

Asked why Britain needed a bank dedicated specifically to farmers, Tim Coates, Oxbury’s co-founder and himself an arable farmer in Oxfordshire, told This is Money businesses required a ‘bespoke’ approach.

‘There is the seasonality element of it, crops planted in the ground have a lot of upfront costs while livestock rearing can take years before businesses receive a return on their investment, it’s a sector with lumpy cashflows which can’t be catered for with simple overdrafts.

‘We’re offering bespoke lending products by people who really understand their businesses’, he added.

‘Lloyds is the largest lender, but farm lending is about 1.5 per cent of their balance sheet. It’s hard to focus on bespoke products when it’s so niche.’

He added the bank planned to fund its lending entirely through deposits from business and everyday savers, pledging that every pound saved would be used to lend to British farmers.

‘Oxbury is 100 per cent dedicated to supporting British farmers and the great thing is that by opening a range of savings products to consumers, we’re giving everyone the opportunity to play their part in our mission and save with a purpose: the clear promise that their savings are backing British farmers and the rural economy’, Coates added.

How do Oxbury Bank’s rates compare to the market? 
Account  Rate  Best buy rate 
95-day notice 0.58% 0.65% 
One-year fixed-rate bond  0.56%  0.85% 
18-month fixed-rate bond  0.65%  0.77% 
Two-year fixed-rate bond  0.75%  1.1% 
Three-year fixed-rate bond  0.9%  1.3% 
Five-year fixed-rate bond  1.17%  1.5% 
Source: Oxbury Bank/This is Money/Savings Champion

The launch of a new bank offering competition in the savings market is the latest piece of good news for savers after Goldman Sachs-backed Marcus Bank reopened its doors to everyday savers on Wednesday morning.

At a time of record low savings rates new banks are one of the sole sources of respite for hard-pressed savers. 

Cash cow: The accounts can be opened with £1,000

Cash cow: The accounts can be opened with £1,000

James Blower, an industry analyst and founder of The Savings Guru, previously told This is Money: ‘New banks like Oxbury and Chase, from JP Morgan, will be essential for savers as they are the only good news I can see for interest rates. 

‘New entrants all typically offer attractive rates to get customers on board at launch, while they have little or no brand recognition.’

All of Oxbury Bank’s six accounts can be opened with £1,000 and savers can deposit a maximum of £500,000, although only up to £85,000 is safeguarded.

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