New ‘table-topping’ savings account earns up to 1.05% interest: Here’s how it works
If you have savings, take note. Zopa has launched a new easy-to-access savings account offering savers the chance to earn up to 1.05% AER interest.
Let’s see how the new account works and how it compares to other savings rates available.
How does Zopa’s new savings account work?
The new from Zopa smart saver account pays savers 0.72% AER variable interest on balances between £1 and £15,000. To open it, you will need to download the Zopa app on your smartphone.
You can save from as little as £1 to a maximum of £15,000. You can make as many withdrawals as you want.
Also, as an unusual quirk, you can increase the savings rate to 1.05% AER interest. To do this, you need to open one of Zopa’s “boosted jars” and select the 95-day notice option. Anything you save in this linked pot will then earn the increased interest rate. However, as the name suggests, you will need to give 95 days notice if you wish to withdraw from the prize pool.
If you’d rather not have such a long notice period to access your money, you can select a shorter notice period instead. Notice periods of 7 and 31 days are also available. If you select the 7-day period, your linked pot will earn 0.75% interest, while the 31-day pot will earn you 0.85% AER interest.
In other words, the longer the notice period, the higher the savings rate.
What else should you know about Zopa’s new account?
The savings rates offered on Zopa’s new account are variable, which means they may change in the future. That said, if rates go down, you’ll be given ample notice and given the option to close your account and move your savings.
It’s also worth bearing in mind that even if you prefer to keep easy access to your money, Zopa says that a notice period attached to some of your savings can mean you’ll be less tempted to dip into your kitty.
Unusually for a savings account, Zopa’s Smart Saver only lets you save up to £15,000. That’s little compared to other savings accounts because you can usually save a lot more than that. Zopa says this lower limit will allow it to “serve more customers, who want to grow their savings over time.”
It is important to note that Zopa Smart Saver has full FSCS saver security protection. This means that if the supplier goes bankrupt, your savings are safe.
How does the account compare to other savings rates available?
Although Zopa’s new offering is technically “tabletop” in terms of easy access, it’s worth knowing that the account is something of a hybrid. This is because it sits between an easy access account and a notice savings account.
Currently, the highest easily accessible savings rate comes from Atom Bank, which pays 0.75% variable AER. That’s a bit more than Zopa’s unboosted “Smart Saver” offering, but significantly lower than its boosted rate of 1.05%. To open an Atom account, you need to apply through its mobile app.
Alternatively, the second highest savings rate available is Cynergie Bank. His account pays 0.72% AER interest, the same rate as Zopa’s unboosted Smart Saver. However, this rate includes a fixed premium of 0.42% for 12 months.
The two alternative accounts above can be opened with as little as £1.
With regard to notice accounts, Chartered Savings Bank is the best alternative to Zopa. Like Zopa’s Smart Saver, it has a 95-day notice period. This account currently pays savers variable interest of 1.02% AER. However, to open it, you’ll need to have at least £5,000 to spare.
For more options on where to put your money, check out The Motley Fool’s Top Rated Savings Accounts of 2022.
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