Through our innovative approach to savings, you can earn market-leading annual interest rate up to 1.20%. With the Bank of England base rate being at a historic low of 0.1%, you can be forgiven for wondering how we do it.
Before we get to that, it is important to have an overview of the alternative options that exist and briefly how they work.
The traditional approach
Broadly speaking, when you are considering a savings account, you are presented with three main options: easy access accounts, notice saving accounts, and fixed-rate accounts. Let's consider these in turn:
Easy access accounts 💸
With an easy access account, generally, the amount of money that you are required to invest is minimal. Also, as the name suggests, you have easy access to your money once it has been invested. No notice period is required; you can withdraw your funds as and when you want to. In return for this, you will be rewarded with a less than great interest rate.
Notice saving accounts ⏰
Again with this one, the name goes some way to providing a clue! You can expect a slightly better interest rate here, but in return, there are restrictions on when you can access your money. Generally, you'd be expected to give 30 days' notice before you can make a withdrawal.
Fixed-rate savings accounts 🔐
I'm sure by now that you may see a pattern emerging; the name doesn't quite say it all but, it certainly drops a hint as to what you can expect here. You will be offered a higher rate of interest, but for this, there is a trade-off. Generally, larger sums of money will need to be invested, and your money will be tied up for 1-5 years. The longer, the better.
The key considerations
By looking at these 3 types of savings accounts, you can see how savers generally have 3 key considerations before investing their money:
- How much do they want to invest,
- How much can they afford to invest, and
- How long can they afford for their money to be tied up?
By understanding these considerations, and the traditional savings options available, it is clear to see that the only way to achieve a higher rate of interest is to:
- Invest the maximum amount of money possible,
- Ensure that amount is affordable for you, and
- Leave the funds tied up for as long as possible.
Now that's all well and good as long as you have access to sufficient funds and as long as you do not need to access them in the short or medium term. If that doesn't quite sound like you, then read on!
A new way
At Depoway, we believed that there could be another way and have worked tirelessly to make this a reality. Having combined our areas of expertise across finance, savings, and technology, we created what can only be described as revolutionary in the savings industry.
So how do we do it? How do we offer you a better interest rate than the high street banks? It is based on 4 components:
- Our bargaining power,
- Our liquidity management algorithm,
- Our laddering algorithm, and
- Our app, monitoring, and reviewing accounts.
Now assuming that still doesn't really answer your question, let's shed some light on these in turn:
Our bargaining power 🧑🤝🧑
As your funds are invested with us, they'll join the funds of other clients. Then they'll join the funds of other clients and those of other clients and..... Okay, I think you get the point that's being made. The important point here is that your funds are part of a bigger pot. With a bigger pot, we can negotiate preferential rates with our partner banks.
The other advantage of your money forming part of that bigger pot is this: remember how we referred to those savings accounts that required a high minimum investment? Well, this bigger pot means you're into those accounts without requiring all of the funds yourself!
Liquidity management algorithm 💰
Perhaps a complex term but one with a simple meaning! We like to keep your money flowing and where it flows is your choice. Liquidity refers to the ease with which you can readily convert something into ready cash. The liquidity of your savings account could be affected by the notice that you may have to give to withdraw your funds. Yes, you can access your money still, but it not readily or instantaneously available.
With us, there is an option to invest your funds into notice or fixed-rate accounts, but there is a difference; we give you the option to access your funds even through the fixed period. You enjoy the higher interest rate usually given as a reward for investing your money for a fixed term, with the ability to withdraw it before the fixed period has ended: the best of both worlds.
Laddering algorithm 🧑💻
What is important here is that this makes your money accessible to you. Your money is not simply held in one place. Instead, it is spread across easy access, notice, and fixed-rate accounts. This again gives you access to an attractive rate of interest without all of the usual constraints. Learn more what is deposit laddering and how does it work here.
Our innovative app 📱
Tying it all together is this: our app works hard. It is constantly working hard and, in turn, ensuring that your money is working hard for you! Your money, as we have seen, is invested in different account types. To just take the money, invest it, and then leave it really wouldn't do.
Instead, on a regular basis, our app will review the accounts where your money is held. If the accounts where this is are now becoming uncompetitive, or under performing, the app will simply, and automatically, switch your funds to ensure a better rate.
Bringing it all together
Depoway achieves the best rate for you through our modern and intuitive approach. We have removed the obstacles that have previously prevented people from benefiting from attractive interest rates. By combining your funds, and then carefully sharing them across different account types, we have the ability to achieve the best return for you. Both securely and with protection.