Zopa launches range of fixed rate savings accounts

Competition within the savings market increased today with the launch of a range of fixed rate savings accounts from Zopa.

Although the new savings accounts being offered by Zopa are not chart-topping, they are still competitive. All the accounts can only be opened and managed online or via mobile app and require a minimum deposit of £1,000. The new accounts are:

• 5 Year Fixed Term Savings, paying 1.29% gross monthly
• 4 Year Fixed Term Savings, paying 1.25% gross monthly
• 3 Year Fixed Term Savings, paying 1.25% gross monthly
• 2 Year Fixed Term Savings, paying 1.14% gross monthly
• 1 Year Fixed Term Savings, paying 1.04% gross monthly

Zopa was originally founded as a peer-to-peer (P2P) company but gained its full banking licence in June and now operates as a digital bank. As such, its savings products are under the Financial Services Compensation Scheme (FSCS), which protects balances of up to £85,000 per banking licence.

Commenting on the launch of the savings accounts, Jaidev Janardana, CEO at Zopa, said: “Today people quite rightly want to know that their savings will deliver a return that helps them make the most of their money. Launching our fixed term savings product delivers the much-needed choice and reassurance of rate that consumers are looking for.

“As a new digital bank, Zopa is using its innovative, agile approach to ensure we bring more choice and competition to people’s financial lives when they need it most. By leveraging our significant technological and financial services expertise, we are able to offer good value, straightforward products and intuitive tools to help people manage their money.”

The news of the new savings products launched by Zopa will be welcomed by savers who have faced months of falling rates after interest rates were cut to a historic low in March and a new Term Fund Lending scheme was launched in April. Saying this, Zopa has not launched chart-topping rates, but, if its savings products prove successful, it could look to increase rates or launch a wider range of products in the future.

Savers looking to get the best rates in the fixed term savings charts will have to consider a challenger bank, as no high street bank or building society is currently offering the top rates. The best rate overall comes from Bank of London and The Middle East (BLME), which pays an expected profit rate of 1.50% gross on anniversary on the seven-year version of its Premier Deposit Account.