Kroo, which was granted a full UK banking licence earlier this year (only the third bank to receive one since 2016), stated that its new 2&2 model will offer a current account at a rate of 2% AER on deposits up to £85,000, an overdraft at an APR one-third less than that of the big banks, deposit protection, and zero fees on spending abroad with a Kroo card.

The new launch arrives as research from the challenger bank reveals that UK households could be missing out on £5.4bn in interest per year, as cash sits idle in 0% interest-bearing deposits.

According to Kroo, this leaves the average UK household nearly £200 per year worse-off.

Kroo’s analysis of Bank of England data shows there was £271bn sitting idle in UK households’ non-interest-bearing sight deposits as of the 30 September 2022, which equates to £5.4bn in lost interest.

Kroo: A new account for a new generation

According to Andrea De Gottardo, CEO of Kroo, the bank is “raising the bar on banking relationships” and the new account is aimed at fulfilling the needs of a new generation of savers.

He said: “The latest generation of savers in the UK want more from their banks. They are fed up with their hard-earned savings sitting idly in a current account for years and years, earning next to no interest.

“In a cost-of-living crisis, your bank should have your back. Every customer deserves a fair return on their savings and the ability to freely access their own money without penalty.”

And according to Nazim Valimahomed, co-founder and chief product and design officer at the bank, Kroo’s mission is to rebuild the bonds between customers and banks.

He said: “We want to improve the relationship people have with their banks and money, and ultimately, to give them more financial independence and control. Our goal is to be a bank that people truly trust and love.”