Digital bank Revolut has entered the competitive UK savings market, with the launch of an easy-access savings account.
The London-based bank said the account will pay a market leading 1.35 per cent per year, comparable with best instant access UK accounts offered by providers such as Yorkshire Building Society and Goldman Sach’s online operation Marcus.
However, the teaser rate will only be offered to Revolut’s highest paying Metal premium account holders who pay £12.99 a month.
The bank says it has amassed 10 million customers in the UK and across continental Europe since it launched five years ago. The vast majority of these are basic customers who pay nothing for their account.
Revolut said the offer will only run for an unspecified limited time, after that “any new deposits will receive a lesser rate”.
The account, held in a Revolut Savings Vaults, is run in partnership with UK investment manager Flagstone. Funds up to £85,000 are protected by the Financial Services Compensation Scheme.
The bank was founded by former Credit Suisse trader Nik Storonsky (pictured, right) and former Deutsche Bank systems engineer Vlad Yatsenko (pictured, left), in 2015.
Revolut chief executive Storonsky said: “Interest rates have been minuscule in recent years, and this has directly impacted the options that people have when it comes to saving money. With the introduction of Savings Vaults, we can now offer our UK customers one of the most competitive rates in the country, with complete flexibility and protection.”
Doing the maths
Around 40 million people in the UK have easy access savings, but only 10 per cent of them – primarily pensioners with large life savings pots – move them around to different accounts to make the most of the best interest rates on the market. Savers who leave their money in the same account with one of the major providers over a long period may currently receive as little as 0.1% in interest
Darren Cook, a finance expert at Moneyfacts.co.uk, said: “Existing Revolut metal customers, who are already paying the monthly service subscription, may be very pleased with this additional option, but new customers may need to do the maths before subscribing £12.99 a month to achieve a best buy easy access rate.”