Whenever you’re looking for a new savings account, you decide which account you need – instant access, notice or fixed term – and look for the best rates. Then you choose the account with the best rate that meets your access needs. The problem is that it can leave you with accounts at several different banks and building societies as you search for the best rates for money you need to be able to access quickly and for money you won’t need during some time.
This is where Zopa’s new savings account could come in handy. The Zopa brand used to be known as a peer-to-peer lender, but it closed that part of its business late last year. It now has a banking license and offers loans, credit cards and savings accounts, the latest of which is the Smart Saver. This lets you divide your money into smaller pots and choose your own interest rates based on when you’ll need the money.
The idea is to open a Smart Saver account, which pays 0.72% with instant access, through Zopa’s banking app. You can deposit up to £15,000 into the account, create individual ‘Access Pots’ and ‘Boosted Pots’ in your account and transfer some of your money there. You can decide how much interest you get on each pot by choosing a different notice period. The base interest rate of 0.72% that Zopa pays on instant access pots is second only to Atom Bank, which pays 0.75%, while boosted pots are the best buys compared to other accounts at prior notice.
“Zopa rates on boosted pots are the highest paying, for their notice period, on the market. They are therefore very attractive to savers looking to switch savings providers,” says James Blower, Head of Digital at Moneyfacts.
Choose to give seven days notice before you want to access your money and you can get a rate of 0.75%, dropping to 0.85% for 31 days notice. The maximum rate is 1.05% for 95 days notice.
The Zopa account could be a great choice if you like saving in small individual pots, as you can benefit from several different interest rates while seeing all your balances in one place.
However, there are a few drawbacks. This won’t suit anyone with a large amount to deposit – you can only save up to £15,000. With this account, Zopa seeks to “attract savers with smaller balances, who will actively use their savings app, rather than savers with larger sums who are only looking to make a large deposit for a period of time”, explains blower. If you are looking for a house for a higher amount, Atom Bank allows deposits of up to £100,000.
Second, the Zopa Smart Saver is an app-based account. You cannot use it without a smartphone. If you prefer online or telephone banking, Shawbrook Bank’s Easy Access Account pays 0.72%. If you want a branch account, you’ll get 0.6% from a few building societies, including Yorkshire, Newcastle and Buckinghamshire.