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Savings update: Bank raises interest rates on accounts to ‘top table position'

Daily Express logo Daily Express 09/08/2022 Patrick O'Donnell
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Zopa confirmed today (August 9) that it was increasing rates on its Easy Access and Notice accounts. As a result, the digital bank's Smart Saver has been moved to the "top table position" which is the UK's first hybrid savings account. This savings product from Zopa was officially launched in February and is a combination of both the Easy Access and Notice accounts.

The Smart Saver has already attracted £266million in deposits from customers in the last six months.

Following the most recent interest rate rise, Zopa's Easy Access account now offers customers 1.81 percent AER.

Furthermore, the online bank's Notice savings account gives customers a rate of 2.05 percent AER.

According to Zopa, the Smart Saver was created to assist young people in boosting their finances.

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ZOPA 1 © GETTY ZOPA 1

The account's unique selling point is that customers can have multiple saving pots at different interest rates and with different access requirements for the first time in the same place.

Customers are able to open up a mix of up to 20 saving pots in total with Zopa across its savings offerings.

This includes the digital bank's Easy Access, Boost 7, Boost 31, and Boost 95 savings accounts.

For example, a customer can have pots across Zopa's 20 Easy Access, or 10 Easy Access and 10 Boost offerings.

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This offering comes as banks and building societies are attempting to mitigate the impact of rising inflation on people's savings.

Last week, the Bank of England raised the base rate to 1.75 percent in an attempt to address the cost of living crisis.

Many banks, such as Zopa, are looking to pass on this rate hike onto their customers as inflation continues to hurt savings.

Currently, inflation in the UK is at 9.4 percent and is expected to exceed 13 percent in the coming months.

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ZOPA 2 © EXPRESS.CO.UK ZOPA 2

While homeowners and those in debt are set to lose out as interest rates are raised to beat inflation, experts are sharing why this is "good news for savers".

Helen Morrisey, the senior pensions and retirement analyst at Hargreaves Lansdown, outlined why savers still "need to work hard" despite recent developments.

Ms Morrisey explained: "Rising rates should be good news for savers, but if you want to cash in on rising rates, you need to work hard.

"Savings rates have been creeping up since December, but some corners of the market have fared better than others.

"One stand-out performer is the one-year fixed rate bond. According to Moneyfacts, between the start of the year and July, the average one-year fixed rate bond has more than doubled from 0.8 percent to 1.75 percent, as smaller and newer banks justled for position.

"It means that once you have an emergency savings safety net of three to six months' worth of essential expenses in an easy access account, it's worth considering tying some of your savings up for a year, and cash in on competition between the challenger banks.

"As always, if you leave your saving in a high street bank, you will likely lag behind those paying the most competitive rates."

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