One of the highest savings rates on the market has just been unveiled, giving savers the chance to earn a 7.1 per cent return.
The deal allows people to put aside money each month, with the potential to make over £100 in interest in a single year.
Zopa has introduced a new regular savings account paying 7.10 per cent AER. Customers can deposit up to £300 each month, with a maximum total of £3,600 over 12 months.
Savers who pay in the full amount every month would earn about £137 in interest, leaving them with a balance of around £3,737 once the account matures.
The account is designed for people who want to save steadily each month.
There is no minimum deposit needed to open the Regular Saver account, but customers must have a Zopa bank account and a Smart Saver account first, the latter requiring a minimum deposit of just £1.
After the 12-month term, the account automatically converts to an easy access account with a 3.5 per cent rate, although customers can open a new regular saver to continue earning the higher rate.
Regular savings products usually offer higher interest rates than standard accounts, rewarding those who stick to monthly deposits.
Britons are looking to boost their savings | GETTYZopa’s 7.1 per cent deal sits between two other top savings offers. Principality Building Society pays a higher 7.5 per cent, but only for six months and with a lower £200 monthly limit, meaning savers can put away just £1,200. That would earn about £27.53 in interest, giving a total of £1,227.53 at the end of the term.
First Direct also offers seven per cent for 12 months, with the same £300 monthly limit as Zopa. Someone paying in the full amount would earn around £136.50 in interest, finishing with £3,736.50.
Although Principality’s rate looks higher, its shorter term and smaller monthly limit mean overall returns are lower than both Zopa’s and First Direct’s year-long accounts.
Another interest rate cut is expected this year | GETTY/PA Research indicates that over 31 million UK bank customers maintain approximately £186 billion in accounts yielding merely 1.5 per cet interest, according to data from Paragon Bank's Spring application. The typical customer holds roughly £10,000 in savings, as reported by Raisin.
Derek Sprawling, Spring's managing director, cautioned: "Too many savers are leaving their money with their current account provider's linked savings accounts."
He highlighted that remaining with savings products connected to current accounts frequently results in "an array of restrictions, such as tiered rates or withdrawal limits, on top of poor rates."
These accounts often feature various limitations whilst delivering returns that fail to match inflation, currently standing at 3.4 per cent.
Customers maintaining £10,000 in accounts paying 1.5 per cent receive just £150 annually in interest.
| GETTYCustomers maintaining £10,000 in accounts paying 1.5 per cent receive just £150 annually in interest. Transferring these funds to Chase's five per cent easy access account would generate £500, representing an additional £350 in earnings.
Sprawling emphasised that alternative options exist for customers, stating it remains "possible to get a rewarding rate of return without sacrificing access to their money or wading through a host of restrictive terms and conditions."
Accounts failing to match the 3.4 per cent inflation rate effectively diminish purchasing power over time.
Products like Zopa's 7.1 per cent offering provide returns that substantially exceed inflation, helping customers preserve and grow their savings' real value.