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Zopa Bank launches “hybrid” savings account to help younger savers level-up post pandemic finances

Zopa Bank launches “hybrid” savings account to help younger savers level-up post pandemic finances | Fintech Finance

Digital bank Zopa has launched a next generation, cutting-edge savings account to help Brits better save in a post-pandemic world by tapping into the £225 billion (1) stockpile of “dead money” sitting idle.

As a base, the Zopa “Smart Saver” offers a 0.72% return for immediate access to savings, which is 72 x the standard high street offering (2). Customers can then choose to “boost” their rates all the way up to 1.05% by locking their money away for longer with a notice functionality.

This is the highest return for equivalent accounts currently available on the market.

For the first time, the Zopa “Smart Saver” also enables customers to have multiple saving Pots at different interest rates and with different access requirements, all in ONE place, balancing ease of access and interest rate from a SINGLE dashboard.

The account offers faster payments, best in class mobile servicing, and no financial penalties for withdrawals. It is FSCS protected and mobile-only, offering younger customers at the beginning of their saving journeys great value without compromising ease of access.

To access funds in a boosted Pot users need to provide:

  • Notice of 7 days for the Boost7 Pot earning 0.75% AER – No 1 on the market
  • Notice of 31 days for the Boost31Pot earning 0.85%, AER – No 1 on the market
  • Notice of 95 days for the Boost95 Pot earning 1.05% AER – No 1 on the market

The innovative “booster” feature was introduced to address unmet user needs identified in Zopa research (3).

Customer insights showed that while 8 out of 10 adults under 30 want to organise their savings based on what they’re saving towards, unlike current accounts, most savings accounts do not have a Pot functionality. A similarly large majority wants to create barriers and limitations on accessing portions of their savings to stop themselves dipping into savings for spending.

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

“And we’re only getting started. Over the next 12 months we plan on doubling our savings portfolio to £2 billion while continuing to find innovative ways to help our customers grow their savings”.

The Zopa “Smart Saver” is the bank’s second savings product. It follows the launch of the Zopa Fixed Rate Savings account that amassed £1 billion in customer savings in only 18 months, topping the savings tables 15 times.

Since launching in 2020, Zopa bank has attracted £1 billion in deposits and £1.5 billion of loans on balance sheet, issued more than 200,000 credit cards becoming a top 5 credit card issuer in the UK, and tripled (3x) its revenue per customer.

In October Zopa raised $300 million led by Softbank to build the UK’s best bank for saving and borrowing. The company will be ready for an IPO as early as Q4 2022 by which time it will have shown a consistent track record of profitability.

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