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Zopa ups easy access savings rate to 1.85%: Why the app-based bank is popular

Savings boost: Zopa's base interest rate is 1.85%, but savers can increase their rate to as much as 2.25% by locking in their money for longer via a selection of accounts at related notice.

Zopa Bank has once again increased its savings rates, rewarding new and existing customers.

Its easy-to-access Smart Saver account now pays 1.85%, making it the third most generous offer on the market according to our savings rate league tables.

Savers can also increase their rate by up to 2.25% by locking in money longer through a selection of linked notice accounts.

Savings boost: Zopa's base interest rate is 1.85%, but savers can increase their rate to as much as 2.25% by locking in their money for longer via a selection of accounts at related notice.

Savings boost: Zopa’s base interest rate is 1.85%, but savers can increase their rate to as much as 2.25% by locking in their money for longer via a selection of accounts at related notice.

Notice accounts allow savers to withdraw their funds after a notice period, usually between 30 and 120 days, giving them a better return than they could otherwise get with an easy-to-access account.

With Zopa, instead of opening a separate notice account, savers can have multiple “pots” of money at different interest rates and with different access requirements, all in one place.

Savers can raise their rate to 1.9% on seven days’ notice, or 2.05% on 31 days’ notice.

For those willing to move their savings to a pot where they will have to give 95 days notice to access it, there is a chance to earn 2.25% via Zopa.

Its 95-day notice count is only bettered by two trades across the market. Investec pays 2.35% on its 95-day notice contract, while BLME pays 2.52% on its 90-day notice account.

All Zopa accounts are covered by the FSCS Deposit Guarantee Scheme, meaning cash is protected up to £85,000 per person.

Why is Zopa so popular?

Unlike many savings providers, Zopa passes its rate hikes on to those who currently hold accounts with it rather than offering them only to new customers.

This means those who signed Zopa’s easy access deal in July, when it was paying 1.5%, will now automatically switch to the 1.85% rate.

Many other easy access savings providers prefer to raise rates through a new issue number, leaving existing customers on the previous issue to pay a lower rate.

Although it could work against savers if rates were to fall, Zopa’s “all for one and one for all” approach is clearly popular with its clients.

Its decision to treat new and existing customers equally, alongside its competitive rates, is perhaps one of the reasons why Zopa is one of the fastest growing challenger banks in the UK.

Having only obtained his full banking license in 2020, he has already scooped up £2billion in cash for savers.

Zopa’s Smart Saver attracted £850m in its first 7 months, while its fixed-term savings accounts attracted £1.15bn in 24 months.

Ambition: Zopa management team says it wants to make billions of dollars work harder

Ambition: Zopa management say they want to make the billions of ‘zombie money’ sitting idle in UK current accounts work harder

However, the way it rewards savers isn’t the only thing to love about Zopa.

Zopa also offers one of the best app-based banking experiences. This is Money recently tested seven savings apps and Zopa came out on top.

It also has 7,401 reviews on the Apple App Store with an average rating of 4.9 out of 5.

How does the Zopa app work?

The registration process only takes a few minutes and from there, logging into the app requires either a fingerprint scan or a six-digit passcode.

It takes up to two hours to transfer money to and from Zopa, but most transfers take around 20 minutes.

An annual income statement is available in the app for those who need to check the total interest they have earned for tax purposes.

Popular: Zopa has 7,401 reviews on the Apple App Store with an average rating of 4.9

Popular: Zopa has 7,401 reviews on the Apple App Store with an average rating of 4.9

It’s worth mentioning that for those with an iPhone, they’ll need to be running iOS 11 or later for the app to work.

Zopa says his ambition is to make the billions of unused “zombie money” in UK current accounts work harder.

James Blower, head of savings at Zopa, said: ‘Amid the cost of living crisis and rising inflation, the low savings rates offered by traditional banks are adding to the pain for consumers and it is important that they look for alternatives.

“Especially savings options that can offer the best combination of interest rates, service, accessibility and tools to manage their money.

‘Zopa Smart Saver is a great option for savers looking for better interest yields, currently offering one of the best interest rates on the market.

“It is also the first savings account that allows consumers to create multiple pots of savings at different interest rates and access requirements based on their specific financial goals.

“These jars also allow customers to keep some of their savings out of reach so they are less tempted to dip into funds unnecessarily.

“Along with that, Zopa is a safe choice for consumers. Its users rate its service excellent on TrustPilot, it has won several Savings Champion Awards, and it is fully regulated by the Financial Conducted Authority and the Prudential Regulation Authority, so savings are protected by the Financial Services Compensation Scheme.

What other app-based savings providers stand out?

Atom launched its operations in April 2016. It offers highly competitive fixed and easy-access savings accounts and secured business loans for small and medium-sized businesses, as well as mortgages.

Atom is a mobile-only bank, with its head office based in the North East of England with a team of over 400 people.

Any savings held with Atom are protected up to £85,000 per person by the Financial Services Compensation Scheme.

Best Deal: Its two-year fixed-rate deal paying 3.4% is currently just 0.15 percentage points below the market leader.

App Store Rating: 4.7 out of 5 based on 26,947 reviews

Atom Bank has nearly 27,000 reviews on the Apple App Store with an average rating of 4.7 out of 5.

Atom Bank has nearly 27,000 reviews on the Apple App Store with an average rating of 4.7 out of 5.

Tandem was launched in 2014 as one of the UK’s first challenger digital banks, offering its customers products across its range or savings products, loans for green home improvement and mortgage loans.

It acquired Harrods Bank in 2018 and Allium Lending Group in 2020 – a company focused on the home improvement lending industry.

Tandem has offices in London, Blackpool, Cardiff, Durham and Manchester and employs over 500 people.

Savings held with Tandem are protected up to £85,000 per person by the Financial Services Compensation Scheme, the UK deposit guarantee scheme.

Best Deal: Its one-year fixed rate paying 3.26% is just 0.14 percentage points from the key market rate.

App Store Rating: 4.3 out of 5 based on 4,572 reviews.

Tandem Bank has nearly 4,600 reviews on the App Store with an average rating of 4.3 out of 5.

Tandem Bank has nearly 4,600 reviews on the App Store with an average rating of 4.3 out of 5.

Al Rayan Bank

Al Rayan Bank is the oldest and largest Islamic bank in the UK, founded in 2004.

Savings held by individuals with the bank are protected up to £85,000 per person by the FSCS.

The bank currently serves over 90,000 customers nationwide and is the only Islamic bank in the UK to receive a public credit rating.

Instead of paying interest to savers, Al Rayan Bank – as an Islamic bank – invests customers’ deposits in ethical and Sharia-compliant activities to generate a profit.

These profit rates offer an expected Sharia-compliant return rather than interest, as with standard accounts.

Since its creation in 2004, the Bank has always paid at least the rate of profit that it indicated to its customers.

Best Deal: Al Rayan Bank’s easy access deal yields 2.1%.

App Store Rating: 3.6 out of 5 based on 748 reviews

Best for instant access: Al Rayan Bank pays 2.1% on its easy access savings offer - more than any other provider.

Best for instant access: Al Rayan Bank pays 2.1% on its easy access savings offer – more than any other provider.

gatehouse bank

This might be the best savings app for the most environmentally conscious savers.

Gatehouse Bank offers a range of fixed rate deals designed to help develop forests across the UK.

For each account opened or renewed, the bank undertakes to plant a tree.

Like Al Rayan Bank, its savings accounts operated according to Sharia principles. This means that interest cannot be earned, but rather we generate profit.

Best Deal: Gatehouse Bank’s Easy Access Agreement pays 2%, which is the second best rate in the market.

It also offers the second best Isa Easy Cash Access offer currently available by paying 1.75%.

App Store Rating: 5 out of 5 out of 4 ratings.

Eco-conscious: Gatehouse Bank offers a range of fixed rate offers designed to help the growth of forests across the UK.

Eco-conscious: Gatehouse Bank offers a range of fixed rate offers designed to help the growth of forests across the UK.

Some links in this article may be affiliate links. If you click on it, we may earn a small commission. This helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any business relationship to affect our editorial independence.

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