Global financial services startup Revolut is now offering U.K. customers a 1.35 percent AER interest rate with its new product, Savings Vaults, the company announced on Thursday (Jan. 23).
Revolut is offering the new savings solution in partnership with the London FinTech Flagstone. Savings Vaults are FSCS-protected up to £85,000 through Paragon Bank.
“Interest rates have been minuscule in recent years, and this has directly impacted the options that people have when it comes to saving money. With the introduction of Savings Vaults, we can now offer our U.K. customers one of the most competitive rates in the country, with complete flexibility and protection,” said Nik Storonsky, founder and CEO of Revolut.
“For us, this is another step toward our goal of democratizing the financial services industry and providing much greater value than traditional banks,” he added. “As we push into 2020, we have a host of new products and services on the way that will help our customers to spend, save and manage their money more effectively.”
Savings Vaults will first be offered to Metal customers, followed by Premium and Standard customers.
Deposits earning 1.35 percent interest will be limited. Interest is paid every day, there is no minimum deposit and withdrawals can be made anytime.
The savings solution also gives Revolut customers the ability to save their spare change by rounding up their card payments. Users can also deposit money by regular and “one-off payments” and convert their existing Vaults into Savings Vaults.
The Financial Conduct Authority (FCA) estimates that 33 percent of consumer cash in the U.K. is in savings accounts opened more than five years ago with an interest rate that is 0.82 percent lower than the newer accounts now offered.
Savings Vaults is the newest solution in Revolut’s Vaults feature, which was introduced in April 2018. About 6,000 new Vaults are opened daily; over 2.5 million Vaults have been opened, with deposits totaling £1 billion.
Revolut’s Metal accounts are offered for a monthly subscription of £12.99. Benefits include stock trading without commission fees, unlimited foreign exchange, worldwide travel and medical insurance and no-fee ATM withdrawals up to £600 per month. Disposable virtual cards are also offered as another weapon to fight eCommerce card fraud.
In October, Revolut expanded its partnership with Mastercard to launch in the U.S. The company’s global expansion plans include Australia, Singapore, Japan, New Zealand, Brazil and Mexico.