Zopa Bank hits £3bn deposits as interest rates highest since 2008

Zopa Bank has hit £3bn of deposits, according to an update from the company. 

Today the nearly three-year-old bank has 850,000 customers. Between them, they have opened 150,000 customer savings accounts.

The world’s first peer-to-peer lender when it launched in 2005, Zopa became a bank in 2020. Since then it has rapidly attracted savers with competitive rates on cash as competition in the savings market continues to heat up.

Savers, hit by soaring inflation, are seeing some relief from the Bank of England hiking interest rates to 3.5 per cent in December, prompting some retail banks to compete for customer funds with more attractive interest rates. Twelve months ago the BoE's interest rate was just 0.5 per cent.

Zopa’s ‘Smart Saver’ account, currently offering 2.86 per cent AER for its easy access option and up to 3.26 per cent for boosted accounts with a 95 days' notice period, has seen £2bn of inflows in less than 11 months. 

The bank’s rate of growth in deposits also seems to be increasing with it taking six months to hit the £1bn mark for this account and just over four months to reach £2bn. Over half of all Smart Saver funds are in its ‘boosted’ pots.

Zopa’s fixed-term savings account, currently offering 4.5 per cent AER for 5 years, has £1bn of customers’ cash since it launched 30 months ago.

“This is an important milestone that reinforces our belief that our proposition centred around fairly priced credit and attractive returns on savings has become a lot more relevant in today’s environment,” said Merve Ferrero, Chief Strategy Officer at Zopa.

“Our fresh take on the saving needs of UK consumers drives every aspect of product innovation at Zopa. Savers should look for value and consider savings options that combine a high interest rate, good service, flexibility, and tools to manage their money instantly with a few taps from their smartphones,” Ferrero said.

On top of its swelling deposit base, Zopa has more than £2bn of loans on its balance sheet and 350,000 credit card customers.