Fintech firm Revolut has boosted its standard plan savings rates to 4 per cent, increasing it from 2.29 per cent previously.
The firm, which is in the process of becoming a bank after receiving its licence last summer, said customers using its paid-for ‘Ultra’ account will receive a best buy 5 per cent rate on their savings.
The Ultra account comes with a hefty £540 annual fee but offers various benefits alongside the boosted savings rate, including a metal debit card and access to Tinder Gold.
On a balance of £10,400, interest is roughly £540, which wipes out the cost of annual fee – although, you’ll need to factor in the Personal Savings Allowance if you’re a higher-rate or additional-rate taxpayer.
Revolut customers receive differing rates depending on their plan, with ‘Plus’ customers receiving 4 per cent, ‘Premium’ 4.25 per cent and 4.5 per cent for ‘Metal’ customers.
A Premium account will set users back £80 per year, rising to £140 for the Metal subscription.
Tiered accounts: Revolut said its paid-for plans offer better savings rates than its standard plan
The easy-access accounts offer instant withdrawals and deposits, while daily interest will be paid on funds held in all of its savings’ accounts.
The rates are available to both new and existing savings account holders. There is no minimum account deposit, and savers can hold up to £200,000 in their account.
Revolut said the moves comes as part of an effort to get people to set higher savings goals.
One in 10 people say low interest rates are the main difficulty they face when trying to save money.
It also comes when many providers have been focusing on boosting best buy easy-access cash Isa rates, rather than on standard accounts.
Albert Codorniu, head of savings at Revolut said: ‘This move is part of our ongoing commitment to challenging the traditional banking system and drive better outcomes for customers.’
The Fintech platform, which has 10million customers in the UK and 50million globally, secured its banking licence in July after a three-year wait for approval.
Currently it is in a ‘mobilisation’ stage, building up its banking operations. It will eventually be able to offer lending products like mortgages and hold customer deposits.
Despite the firm’s status as a fintech platform, account holders savings will be protected up to £85,000 through the Financial Services Compensation Scheme via Clearbank Ltd.
Revolut said users can also make use of the spare change feature, allowing them to round-up their transactions to the nearest pound, with the difference being placed in their saving spot.
Users can also boost these roundups by up to ten times, the firm added.
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