How Zopa’s savings rates compare with the rest of the market

Zopa has unveiled a range of exclusive savings rates for existing investors ahead of its banking brand officially opening for business later this year, but how does it compare to the rest of the market?

There is little incentive for banks to providing attractive savings rates at the moment.

The Bank of England base rate is at 0.1 per cent and lenders can access the term funding scheme so there is enough cheap money available without needing to attract deposits.

However, if Zopa Bank wants to make its mark in this space it will need to be competitive.

It announced earlier this week that its savings range would offer exclusive one-year terms at 1.1 per cent AER, two-year terms at 1.4 per cent, three-year terms at 1.5 per cent, four-year terms at 1.55 per cent and five-year terms at 1.6 per cent.

Interest is fixed and paid into the account monthly.

Read more: How Zopa Bank can crack the savings market

If these products were released today, Zopa would be top of the best buys based on all terms.

In contrast, the best buy one-year fixed savings rate is currently one per cent from United Trust Bank, according to Moneyfacts.

You can fix your savings rate for two years at 1.15 per cent with Gatehouse Bank with a £1,000 deposit.

Charter Savings Bank offers a three-year fixed savings rate at 1.26 per cent.

Four-year fixed rate savings deals are more rare but the Bank of London and The Middle East (BLME) offers 1.45 per cent and the Union Bank of India has a rate of 1.25 per cent.

BLME offers a five-year fixed rate savings deal at 1.50 per cent or Shawbrook has a 1.25 per cent offer.

New savings rates are released all the time and Zopa’s current range is only exclusive rates on offer to investors so could be different once it actually launches to the wider market.

It does, however, suggest that the brand is willing to be competitive even if it doesn’t have to be.

Read more: Zopa backer predicts bright future for peer-to-peer lender