Zopa Bank has increased its savings rates once more, rewarding both new and existing customers.
According to our savings rate rankings, its easy-access Smart Saver account currently pays 1.85%, making it the third most generous option on the market.
Through a variety of connected notice accounts, savers can also increase their return to 2.25 percent by locking away funds for longer.
Notice accounts enable depositors to take their savings after a notice period, often lasting from 30 to 120 days, and give a higher rate of return than an easy-access account would.
With Zopa, as opposed to opening a separate notice account, savers can have numerous “pots” of money with varying interest rates and access requirements in a single location.
In exchange for a seven-day notice period, savers can increase their rate to 1.9%, or 2.05% in exchange for a 31-day notice period.
Zopa allows users to earn 2.25 percent if they are willing to transfer their savings to an account that requires 95 days’ notice to withdraw funds.
Its 95-day notice account is only surpassed by two other offerings on the market. Investec’s 95-day notice deal is priced at 2.35 percent, while BLME’s 90-day notice account is priced at 2.52 percent.
All Zopa accounts are insured by the FSCS deposit guarantee scheme, which protects cash up to £85,000 per account holder.
Why is Zopa so popular?
Zopa, unlike many other savings providers, applies its rate increases to all of its existing account holders, not only to new ones.
Those who signed up for Zopa’s easy-access package in July, when it was paying 1.5%, will now automatically be upgraded to the new rate of 1.85%.
Numerous other providers of easy-access savings choose to increase rates via a new issue number, leaving existing clients on the previous issue to pay a lesser rate.
This may work against savers if interest rates decrease, but Zopa’s ‘all for one and one for all approach to interest rates is popular with its clients.
Its resolve to treat new and existing clients equally, coupled with its cheap interest rates, maybe one of the reasons why Zopa is one of the UK’s most rapidly expanding challenger banks.
Despite only obtaining its full banking license in 2020, it has already amassed £2 billion in savings.
Smart Saver attracted £850 million in its first seven months, whilst fixed-term savings accounts attracted £1.15 billion in their first 24 months.
However, Zopa’s method of rewarding savers is not its sole attractive feature.
Zopa also provides one of the top mobile banking applications. This is Money recently evaluated seven savings apps and found Zopa to be the best.
Additionally, it has 7,401 reviews with an average rating of 4.9 on the Apple app store.
How is the Zopa app utilized?
The registration process takes only a few minutes, and thereafter, login into the application requires a fingerprint scan or a six-digit passcode.
Transferring funds in and out of Zopa can take up to two hours, while the average transfer time is around 20 minutes.
For tax purposes, the app provides an annual income statement for users who need to review the total interest they’ve earned.
It is important to note that iPhone users must be running iOS 11 or later for the application to function.
Zopa aspires to make the billions of ‘zombie money’ sitting in UK current accounts more productive.
James Blower, head of savings at Zopa, says: ‘Amid a cost-of-living crisis and rising inflation, the low savings rates offered by legacy banks are exacerbating the plight of consumers, so people must shop around for other options.
‘Especially options that give the best combination of interest rate, service, accessibility, and money management features.
‘Zopa’s Smart Saver is a wonderful alternative for savers seeking higher yields, as it presently offers one of the market’s highest interest rates.
It is also the first savings account that gives consumers the option to construct multiple savings pots with varying interest rates and access requirements to meet their particular financial goals.
‘These pots also allow clients to keep a portion of their savings out of reach, so they are less likely to be tempted to withdraw funds inappropriately.
In addition, Zopa is a secure option for consumers. It has received multiple honors at the Savings Champion Awards and is fully regulated by the Financial Conduct Authority and Prudential Regulation Authority, so savings are protected by the Financial Services Compensation Scheme.’
