Raisin is an online savings marketplace that allows savers to compare rates and open a number of different accounts all under one roof.

So how do these platforms work? And are they a good option for savers? Let's take a look...

What is an online savings marketplace?

An online savings marketplace is a platform that aggregates savings accounts from different banks into a central hub.

The idea is that savers can sign up to an online marketplace, deposit funds, and then choose where to put their money — all within a single login.

In the UK savings marketplaces weren’t really a ‘thing’ until German-based Raisin launched its platform in 2018. Nowadays there are a handful of marketplaces out there such as Hargreaves Lansdown, Flagstone, Insignis Cash, and Octopus Money, though it’s probably fair to say that Raisin remains the most well-known.

What are the benefits of using a savings marketplace?

Now we’ve explained what an online savings marketplace is, let’s explore some of the main benefits of using one…

1. They can make life easier.

Arguably the biggest benefit of using an online savings marketplace is convenience. That’s because if you stash your cash in an online marketplace, it’s easy to keep an eye on your balance and interest rate.

Should you discover the rate you’re earning can be beaten, with an online savings marketplace you can simply shift your cash to another account within the platform (as long as your cash isn’t locked away in a fixed account, of course).

While withdrawing your cash and moving your money to another savings account is also possible when it comes to managing a savings account the traditional way, there’s far more faff involved. For starters, when opening a new account you normally have to fill out a brand-new application form which can be time-consuming to say the least!

2. They’re transparent.

Another benefit of using an online marketplace is transparency. This is because when using an online marketplace, it’s easy to compare rates and digest eligibility requirements for each provider.

With online savings marketplaces, minimum and maximum deposit limits are typically similar between accounts. It’s also rare to find an account with lots of stipulations – such as an ‘easy-access’ account with limited withdrawals.

In contrast, minimum and maximum deposit limits are something you need to keep a close eye on when you open and manage a savings account the traditional way. Likewise, restrictive withdrawal limits on easy-access accounts are now quite common, so this may be another reason to opt for an online marketplace.

3. Some accounts aren’t available elsewhere.

Another big benefit of using an online savings marketplace is the opportunity to come across exclusive savings accounts not available elsewhere.

There are also occasions when these 'exclusive’ marketplace deals are table topping.

What are the drawbacks of savings marketplaces?

1. They don’t compare whole of market.

Yes, online marketplaces can make it a whole lot easier to compare rates and switch accounts. However, online marketplaces only work with a select number of banks. So, while rates offered may be competitive, many will miss those table-topping deals (which you’d find in our best savings accounts guide)!

2. You’ll need to keep an eye on FSCS protection.

While marketplaces often make it clear whether or not your money is covered by the all-important Financial Services Compensation Scheme (FSCS), don’t lose sight of the fact that only £85,000 of your money is protected per financial institution.

Importantly, some savings platforms share their FSCS protection with partner banks. For example, the Hargraves Lansdown marketplace shares its FSCS protection with Barclays Bank. This means if you’ve already £70,000 saved with Barclays, and you then transferred £20,000 to Hargreaves Lansdown, £5,000 of your cash wouldn’t be covered under FSCS in the (unlikely) event Barclays went under.

Not a huge downside, but something to keep in mind.

3. Rates are sometimes lower than going direct.

If you open an online savings marketplace account, you may be tempted to rely on it to compare rates. And while we’ve already covered the fact that marketplaces don’t cover whole of market, it’s also worth bearing in mind that there are occasions when rates offered by online marketplaces are lower than the rates you can earn by opening an account directly with the same provider.

The best way around this downside is to always check before opening an account through a marketplace. Similar, in some ways, to how you might check the price of a hotel directly, rather than rely only on a third-party booking website.

How does the Raisin online savings marketplace work?

Raisin is the most well-known online savings marketplace in the UK. The company launched its platform in Britain back in 2018, six years after successfully establishing itself in Germany.

Raisin currently partners with 30 British-based banks and building societies, and offers a range of savings accounts, including easy-access, fixed, notice, and sharia-complaint offerings.

You can manage your accounts through Raisin’s website, or its mobile app where you can view your balance, look at previous transactions, and download statements.

Once registered with Raisin, you’ll be invited to add your funds into a secure wallet. You can then move your cash to a savings account of your choosing.

On its website, Raisin makes a point about being able to open ‘as many accounts as you like’ so there’s nothing stopping you opening more than one type of account. Do note that if you opt for a fixed savings account, interest and your initial deposit will be paid back into your Raisin account at maturity (which you can then withdraw to your nominated bank account).

In terms of eligibility, to use the Raisin platorm you need to be a UK resident aged 18 or over and have a UK bank or building society account that accepts electronic transfers. At the application stage you’ll also need to have your UK tax and National Insurance number at hand.

All accounts offered by UK banks through Raisin are protected by the Financial Services Compensation Scheme. (You’ll see the purple FSCS logo clearly displayed beside each provider in Raisin’s best-buy tables.)

What rates are available with Raisin right now?

Right now, Raisin’s highest easy-access account is through Kroo. The account pays 4.72% AER variable and you can open it with £1,000+. While the rate is respectable it’s lower than Metro Bank’s market-leading 5.22% offering (though with this account the rate drops to 1.65% after 12 months).

In terms of fixed accounts, the top one-year fix though Raisin is with Isbank which pays 5.65% AER. Meanwhile, Raisin’s top three-year fixed offering is with Zenith Bank, which pays 5.5% AER. Both of these rates are just a touch below the respective market-leading offerings of 5.91% and 5.55%.

For Raisin’s notice accounts it’s a similar story. Castle Community Bank — a Raisin exclusive — pays 5.26% with a 90-day notice period. However, the market-leading 90 days notice account pays 5.51% AER.

Yet while Raisin doesn’t currently offer any accounts that beat existing deals, it’s important not to completely disregard online marketplaces. The convenience alone means online marketplaces have their place in today's fast-paced world where many savers are happy to forgo a smidgen of interest if it saves them an application for or two. And let's not forget, while Raisin's rates may lag behind market-leading deal today, it's possible we’ll see the platform up its game in the future.

It's worth knowing that when Raisin first launched in the UK it was known for offering generous cashback deals. Incentives like this may be reintroduced in future. Likewise, Raisin’s exclusive deals are sometimes very competitive - another reason to keep a close eye on the platform going forward.

Keen to stay on top of market-leading savings deals? Take a look at our best savings accounts guide for a list of the top accounts.