Barclays US Consumer Bank Launches Savings Product With Tiered Rates

Barclays US Consumer Bank has launched a savings product that provides higher rates on higher balances.

The new Barclays Tiered Savings product aims to offer customers additional value and bolster the bank’s deposits portfolio, the company said in a Tuesday (July 16) press release.

“Our goal is to offer pricing flexibility that rewards higher balance customers who want the convenience of saving online with competitive interest rates,” James Capolongo, head of banking at Barclays US Consumer Bank, said in the release.

The product offers tiered pricing and makes it simpler for customers to earn higher rates and reach their financial goals, according to the release.

Barclays’ online experience allows consumers to open an account, deposit funds or checks remotely, view account balances, and link to other U.S. financial institutions, per the release.

Having high-yield savings accounts offers banks a way to cross-pollinate revenue streams as diverse as credit cards and investment products, PYMNTS reported in 2022. The net interest margin can help fund those initiatives.

FinTechs, too, have found that high-yield accounts help them unlock a relatively cheaper source of capital. Having cheaper capital in hand can in turn boost balance sheet strength and fund operations as deposits reach critical mass.

PYMNTS Intelligence has found that savings accounts may be a key battleground in the competition between banks and neobanks.

Twenty-five percent of consumers would switch from their banks for savings accounts, according to “Personalization Beyond Traditional Banking to Build Financial Wealth,” a PYMNTS Intelligence and NCR collaboration.

The report also found that the race to boost savings rates on accounts — and to lure deposits — is and has been global in scope.

In this competition, the advantage may go to the traditional financial institutions who have the installed base of clients, the financial firepower, and a host of complementary and adjacent revenue streams that the digital-only startups just don’t have.

In the Tuesday press release from Barclays US Consumer Bank, Capolongo said: “Barclays deposits program has been a significant contributor to the US Consumer Bank for over a decade. The Tiered Savings product will elevate our deposits business by unlocking additional value for our customers and bolstering our successful deposits portfolio.”