Latest news with #ErkiKilu
Finextra
21-05-2025
- Business
- Finextra
LHV Bank launches current account
LHV Bank, a fully licensed UK bank, today launches its new fee-free current account with market leading 3.25% AER on all balances up to £1 million, tracking the Bank of England Base Rate minus 1%. 0 This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author. Today's launch provides a new alternative for the UK public and takes aim at the £252bn of deposits* held in non-interest-bearing bank accounts in the UK. By contrast, LHV Bank customers' money is always at work, earning a market leading rate of interest from the moment it goes into their current account. New research from LHV Bank and Opinium – surveying 2,000 UK adults – reveals the scale of Britain's 0% interest current account challenge. Less than a third (30%) of Britons report collecting interest on their most used current account, whilst two in three (64%) believe banks should be responsible for warning them if their current account is not earning interest. Two fifths of respondents (41%) would support Government legislation to ban 0% interest rate current accounts altogether.** LHV Bank aims to be the best place to save money and, alongside the new current account, offers a range of competitive fixed rate savings bonds with further savings products planned. It secured its full UK banking licence in 2023 and is now doubling down on its commitment to the UK market, where it sees significant opportunities for innovation and disruption. The launch of LHV Bank's current account offer is accompanied by an advertising campaign aimed at 'Reckless Savers'. The campaign goal is to encourage UK consumers to switch banks to earn interest on their current account balance, in turn pushing the banking industry to better by its customers and offer current account interest as standard. Reckless Savers can sign up today to LHV and make their money work harder for them. Erki Kilu, CEO of LHV Bank, said: 'The majority of UK banks are focused on helping customers to spend money, but at LHV we take a savings first approach. We believe that every penny deposited with your bank should earn interest, making it easy to be a 'reckless saver' and make the most of your money. LHV is a bank for savers, not for spenders.' Alongside leading interest rates, from today LHV customers can make use of: A fresh, new banking experience: the LHV Bank app has been designed from scratch to offer customers a seamless self-service user experience Advanced fraud prevention: cutting-edge real-time risk decisioning technology protects customers from fraud and scams Fee free interest: access to fee free market leading interest rates on current account balances as standard Debit Cards: stylish, minimalist Debit Cards in a range of colours to match any style with no current account or overseas debit card transaction fees Google Pay: enabled from launch, with Apple Pay coming soon Kris Brewster, Director of Retail Banking at LHV Bank, said: 'Millions of people across the UK are being short-changed by banks offering 0% on their current accounts. At LHV, we're giving customers the tools to take control – combining meaningful interest rates, modern app-based technology, and complete transparency to help them make smarter money decisions every day.'
Daily Mail
20-05-2025
- Business
- Daily Mail
LHV launches first new current account in the UK for four years and offers 3.25% uncapped interest on balances
Britons will have another current account to choose from as LHV Bank, a fully licenced bank, has launched a new offering. It is the first new current account to launch in Britain since 2021 when Chase Bank burst onto the scene, and it already offers savings accounts and loans. LHV which has been operating in the UK since 2018, after establishing itself as the third largest bank in Estonia, received a banking licence in 2023 and has been developing its UK current account for a year and a half. Erki Kilu, chief executive of LHV, told This is Money at its London HQ it is a natural progression for LHV to offer current account, as it already offers loans and fixed-rate saving accounts. He said: 'For me real banking is making credit and making interest income. I can't imagine a bank without current accounts.' As an entirely app-based bank, it is taking on the likes digital banking giants Starling, Monzo and Chase by offering customers 3.25 per cent interest on any balances held in the current account. This rate tracks 1 per cent lower than the Bank of England base rate so it rises and falls with it. Starling scrapped its 3.25 per cent current account interest on balances up to £5,000 in February, as did Chase with its 1 per cent current account interest. The only other bank accounts which pay interest on current account balances at the moment are digital bank Kroo, which pays 3.15 per cent on balances up to £500,000 and also tracks 1 per cent lower than the base rate. Nationwide's FlexCurrent account pays 5 per cent interest on balances up to £1,500 for 12 months. After that the interest is 1 per cent on balances after that up to £1,500. With markets pricing in three more interest rate cuts by the end of this year, customers could find their current account interest slashed to 2.5 per cent, assuming the bank of England votes to cut the base rate by 0.25 percentage points each time. However, the Bank of England's chief economist has warned it has been cutting rates too quickly. That would still be better than earning no interest at all though. There is a chunky £1million cap on balances which can receive interest in the current account, which seems like an expensive business for LHV. But with the base rate at 4.25 per cent and commercial banks earning this rate on deposits held with the central bank, Kilu is not phased by this. He says: 'It's not loss-making for us if we have higher sums. We keep it in the central bank.' 'If the amounts kept in current accounts are £1million then we need to keep them very liquid and can't use them for lending.' As the Financial Services Compensation Scheme limit, which protects deposits if a firm fails, stands at £85,000 people don't tend keep sums bigger than this in accounts anyway. Funds held in LHV accounts are protected under FSCS. The average amount held in a current accounts paying no interest is £2,067, according to research from Paragon Bank. If this were held in the LVH current account it would earn £67 after a year at 3.25 per cent, albeit if the rate stays the same. Kilu didn't rule out the possibility of launching Isas in the future. But as it's next step LHV's will look to launch overdrafts and linked easy-access accounts, which will arrive within a few months. The current account is designed to be intuitive and self-service so new customers can open and use the account quickly. Customers will receive a debit card and can use google pay, with Apple pay expected to launch soon. Kilu said: 'If we develop anything then it should be easy to use for the customers so they don't need any handholding. But with said, should new customers require help with banking queries LHV has customer service help via email currently and there is a dedicated customer service team based in the UK. 'If customer numbers grow, then of course we need to keep an eye on customer support', says Kilu. But he is coy about the number of customers LHV anticipates it will attract in its first year. 'We are a bank for savers, not for spenders. If you want a good interest rate and to start saving with small amounts then LHV should be the first choice.'
