New auto switching service for savings set to launch
Kepe, from peer-to-peer platform Crowdstacker, will remove the need to manually search for, and switch to, new accounts once initial introductory rates have expired.
It will work in a similar way to auto energy switching services like Look After My Bills and Weflip, which move you whenever a cheaper gas or electricity tariff becomes available.
Customers will sign up to Kepe once, and from then on, their money will be automatically moved to different savings accounts best suited to meet their needs and offering the best rates.
Kepe will work with an initial panel of both mainstream and challenger partner banks across a range of easy access, notice, fixed term and cash ISA products.
There is no limit to how much can be saved and customers will be able to divide their money across different types of products, for example, half in easy access and the other half split among various fixed term products.
The new service aims to bring an end to the so-called ‘loyalty penalty’, where savers are rolled onto lower rates once their initial preferential rate has come to an end.
A ‘super complaint’ lodged by Citizens Advice to the Competition and Markets Authority estimated savings customers had lost out on more than £800m since September 2018 because higher rates are only offered to attract new customers.
Research by Kepe found that despite less than one in five (19%) savers saying they are confident they are getting the best interest rate on their savings, two-thirds (66%) said they were unlikely to bother switching.
The Financial Conduct Authority (FCA) estimates that £117bn of the money held in easy access cash savings accounts, and £21bn held in cash ISAs, has been in accounts opened for more than five years.
Karteek Patel, chief executive of Crowdstacker, said: “People want better rates but they aren’t doing anything about it. A lot of money is obviously just sat there not working as hard as it could.
“This customer inertia is owing to misplaced brand loyalty, and probably confusion caused by multiple product offerings and unclear communications.”
Kepe customers will be notified of a switch when it happens, with up to the minute information on the status of their cash available via their dashboard.
It will not take commissions from partner banks. Instead, customers will be charged a fee for money on account. No further details about price have been released, however, at launch, there will be no fees on balances up to £1,000.
The best deals will be identified using a combination of technology and human intervention.
You can pre-register for a Kepe account now at https://www.crowdstacker.com/kepe/register