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February 26, 2018

easyMoney to challenge big banks with new savings account

E-money Capital, an online finance company trading as easyMoney, has rolled out an individual savings account (ISA) in Britain in a bid to attract business by providing better interest rates than high street banks.

The easyMoney ISA, the first of many products planned by easyMoney, seeks to make improved personal finance products available to everybody.

The company’s Innovative Finance Isa will help write online peer-to-peer loans secured against people’s property. The cash will be sourced from investors in easyMoney’s new “Innovative ISA”, which provides 4.05% interest per annum.

Currently, the lending market is dominated by RBS, HSBC, Barclays and Lloyds. easyMoney expects to compete with these big four banks with the new product in Britain, where ISAs are tax free.

easyMoney is owned by Stelios Haji-Ioannou, the founder of budget airline easyJet.

Haji-Ioannou said: “Everyday investors in the UK have gone almost a decade without real interest rates. With the easyMoney Innovative Finance ISA, we’re offering something new and taking on the big boys.”

easyMoney’s new ISA will pit against Funding Circle and RateSetter which offer slightly higher interest rates.

Even the best easy-access cash ISAs offered in the market provide only an annual interest of 1.21%, while the inflation rate hovers around 3%, which implies that investors stand to lose money every day.

easyMoney CEO of Andrew de Candole said: “Financial services in the UK are in desperate need of a shake-up. Like European air travel 23 years ago, the ISA market is crying out for someone to give everyday investors more for their money.

“We’re offering a clear, simple alternative to a cash ISA for investors looking for real returns in exchange for a little more risk. The inflation-busting interest rates we target are streets ahead of anything the banks could contemplate.”

easyMoney claims that it can offer higher interest rates than cash ISAs as it does not have expensive branch networks like the high street banks and does not require intensive capital usually applied to banks.

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