Digital challenger brand Revolut has entered the UK savings market with a new easy access deal paying 1.35%.
Only limited deposits will be accepted at the 1.35% interest rate according to Revolut, which offers a range of money management services which can be operated from a mobile.
After the limit is reached, any new deposits will receive a lesser rate.
The “savings vaults” account is initially being made available to people with an account called Revolut “metal” – a £12.99-per-month subscription account.
The metal account comes with certain perks, including worldwide travel and medical insurance, airport lounge access, concierge services and shopping discounts.
Savings vaults accounts allow Revolut customers to round-up their card payments and instantly save their spare change. Funds can also be deposited by regular and one-off payments.
Money placed in savings vaults will have the protection of the UK’s savings safety net, Revolut said.
Funds held in savings vaults are deposited with Paragon Bank and protected by the Financial Services Compensation Scheme (FSCS) up to a value of £85,000.
Nik Storonsky, founder and chief executive of Revolut, said: “As we push into 2020, we have a host of new products and services on the way that will help our customers to spend, save and manage their money more effectively.”
Darren Cook, a finance expert at Moneyfacts.co.uk, said Gatehouse Bank has an easy access account paying 1.4%, while Marcus by Goldman Sachs, Yorkshire Building Society and Chelsea Building Society have deals paying 1.35%. The minimum investment amounts required for these accounts and account terms varies.
Mr Cook said: “Savers have had a torrid time of late, with rates generally being cut across the board.
“However, 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.”