Zopa enters current account market offering cashback and 7.10% savings interest
Digital bank Zopa has entered the current account market, enabling customers to earn 2% interest on balances as well as cashback and 7.10% interest on a linked savings account.
The new account, called Biscuit, offers 2.00% AER (annual equivalent rate) interest on balances.
Customers can also earn 7.10% interest on a regular saver account, depositing up to £300 per month.
After 12 months the regular savings account becomes an easy access savings account (with a current rate of 3.50%) but customers can then open another regular saver, the bank said.
People can also earn 2.00% cashback on bills on up to £1,500 of direct debits per year.
Merve Ferrero, chief strategy officer at Zopa Bank, said Biscuit aims to deliver 'great value across everyday spending and saving'.
A survey commissioned by Zopa indicated that nearly a quarter (24%) of people chase cashback offers while nearly a fifth (19%) have multiple bank accounts and financial products in a bid to find value, sidestep fees or to be rewarded for their loyalty.
A third (33%) of people surveyed said they prefer the bulk of their bills and significant outgoings to leave their account on or close to payday, so they know how much money they have left to spend.
One in eight (12%) people have some 'no spend' days during the week and more than a third (37%) use mobile banking to stay on top of their finances.
The research was carried out by OnePoll, among 2,000 people across Britain who are in employment, in June.
Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said: 'It is exciting to see another challenger bank launch a current account into the fray for consumers hoping to make their money work harder for them. Digital banks are offering some lucrative benefits and are a refreshing alternative to the major higher street banks.
'The perks of traditional current accounts do tend to vary depending on how a customer uses it.'
She said the Zopa account 'may be suited to consumers who don't want the hassle of opening a variety of accounts to cover different needs'.
Ms Springall said it is vital that customers work out how much they will fully earn from any account.
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