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Fintech company Revolut has increased its standard plan savings rates to 4 per cent, increasing them from 2.29 per cent previously.
The company, which is in the process of becoming a bank after receiving its license last summer, said customers who use its paid ‘Ultra’ account will receive a 5 per cent best buy rate on their savings.
The Ultra account comes with a hefty annual fee of £540, but offers several benefits alongside the improved savings rate, including a metal debit card and access to Tinder Gold.
On a balance of £10,400, the interest is approximately £540, which eliminates the cost of the annual fee, although you will need to take into account the Personal Savings Allowance if you are a higher rate or additional rate taxpayer.
Revolut customers receive different rates depending on their plan: ‘Plus’ customers receive 4 percent, ‘Premium’ customers 4.25 percent and 4.5 percent for ‘Metal’ customers.
A Premium account will cost users £80 per year, rising to £140 for the Metal subscription.
Tiered accounts: Revolut said its paid plans offer better savings rates than its standard plan
Easy-access accounts offer instant withdrawals and deposits, while daily interest will be paid on funds held in all of your savings accounts.
Rates are available to both new and existing savings account holders. There is no minimum account deposit and savers can have up to £200,000 in their account.
Revolut said the move comes as part of an effort to get people to set higher savings goals.
One in 10 people say that low interest rates are the main difficulty they face when trying to save money.
It also comes as many providers have focused on boosting Best Buy Easy Access Cash Isa rates, rather than standard accounts.
Albert Codorniu, head of savings at Revolut, said: “This move is part of our ongoing commitment to challenge the traditional banking system and drive better outcomes for customers.”
The fintech platform, which has 10 million customers in the UK and 50 million worldwide, obtained its banking license in July after a three-year wait for approval.
It is currently in a “mobilization” stage, strengthening its banking operations. Over time it will be able to offer credit products such as mortgages and retain customer deposits.
Despite the company’s status as a fintech platform, account holders’ savings will be protected up to £85,000 through the Financial Services Compensation Plan through Clearbank Ltd.
Revolut said users can also make use of the extra change feature, allowing them to round up their transactions to the nearest pound and put the difference into their savings.
Users can also increase these raids up to ten times, the company added.
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