Digital bank Zopa is introducing a hybrid savings account with multiple stash “pots” and the opportunity for boosted interest rates based on length of deposit time and withdrawal notice.
The Zopa Smart Saver account offers a base rate of return of 0.72% for immediate access to savings — a rate that is 72x the standard high street offering, the London-headquartered challenger bank said in a press release emailed in PYMNTS on Wednesday (Feb. 23).
Customers can earn higher interest rates by opting to “boost” their rate up to 1.05% — the highest return for equivalent accounts currently available on the market — by committing to longer deposit times with a notice for withdrawals.
Boosted Pot users at the 0.75% AER level must give seven days’ notice to withdraw funds. Users at the 0.85% AER level, a notice of 31 days and customers at the 1.05% AER tier, a notice of 95 days.
Zopa customer insights revealed that 8 out of 10 adults under 30 want to categorize their savings based on goals. A similar majority indicated they wanted barriers to prevent themselves from using savings for random spending.
“The Zopa Smart Saver combines the best of both banking and FinTech when it comes to helping customers save money. By building on the foundations of the easy access account but evolving it, Zopa offers a higher interest rate in a sustainable manner,” said Merve Ferrero, chief strategy officer at Zopa.
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“At the same time, it gives users control over how and when they access their money based on their goals. And we’re only getting started. Over the next 12 months, we plan on doubling our savings portfolio to 2 billion pounds while continuing to find innovative ways to help our customers grow their savings,” Ferrero said.
Smart Saver is Zopa Bank’s second savings product following the introduction of the Zopa Fixed Rate Savings account, which hit 1 billion pounds ($1.36 billion) in customer savings in January, just 18 months after becoming a bank. Zopa also has 1.5 billion pounds ($2 billion) of loans on its balance sheet and has issued more than 200,000 credit cards.