Bank announces new interest rates with ‘boost’ account offering ‘best of both’

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Last month the Bank of England announced it would be doubling the base rate from 0.25 to 0.50 percent but banks have been slow to pass on the rise to their savings clients. The new Smart Saver account by Zopa is a combination of easy access and notice account, providing savers with the ability to ‘boost’ their interest rates.

The Smart Saver alone is an easy access savings account offering a 0.72 percent annual interest rate. 

However, the key point for savers is the boosting ability of this account as the interest doesn’t stop at 0.72 percent. 

The Smart Saver account allows customers to have multiple savings pots with different interest rates and access requirements in a single dashboard. 

Customers can choose to boost their interest up to 1.05 percent by locking their money away with a notice functionality. 

Notice accounts act similarly to easy access accounts except they require more notice in order to withdraw savings from it. 

These accounts do not have financial penalties for withdrawals during the account term like fixed rate accounts do. 

The boosted pots from Zopa offer three different interest rates depending on how long of a notice period saver are willing to have:

  • Seven days notice: 0.75 percent
  • 31 days notice: 0.85 percent
  • 95 days notice: 1.05 percent 

Zopa research compelled them to create this account as they found eight out of 10 adults under the age of 30 wanted to better organise their savings based on their savings goals. 

The pots functionality offered by Zopa now provides them with this ability and limits the accessibility just enough to stop savers from dipping into the savings too often.

Additionally it can provide a streamlined way for younger people to save as they can earn different interest rates on each pot depending on how long they plan to save for. 

For example, emergency fund savings are recommended to be kept in easy access accounts while saving for big ticket items such as a car or holiday can be kept in the 95 day notice account. 

This allows savers to earn more interest on their longer-term savings goals, making those goals more tangible at the same time. 

Chief Strategy Officer at Zopa, Merve Ferrero, shared: “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. 

“At the same time, it gives users control over how and when they access their money based on their goals.”

The digital bank is hoping to launch the ‘next generation’ of savings accounts in a post-pandemic world. 

Savers can open the Smart Saver account with only £1. 

A maximum of £15,000 is allowed to be saved in the account, while Zopa’s fixed term savings account may be better suited to savers looking to put away more than this. 

The account can only be opened and managed through the Zopa app, where savers will need to answer a few questions before they are able to open their account. 

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