App-based bank Zopa has launched a new investing product targeted at first-time investors, saying it wants to help customers to ‘grow their money confidently’.
Customers are able to open an investing account with just £1. They will be charged an 0.54 per cent management fee, with no other charges.
The product will offer two ready-made investment funds to users at launch, and plans to expand its investment products in future.
The two funds, ‘balanced’ and ‘bold’ offer a performance track record of 4.5 per cent and 9.3 per cent on average respectively, Zopa said.
They will be available in both stocks and shares Isa wrappers and in general investment accounts.
Best-buy cash Isas currently offer just over 4.5 per cent interest rates, with the top account, offered by Etoro, paying 4.67 per cent for the first 12 months.
Zopa’s investment funds will be managed by Invesco, one of the world’s largest investment managers
Future updates to the product will see the addition of exchange traded funds (ETFs), as well as improvements to user experience, including ‘insights and prompts’ to help customers make the most out of the product, Zopa said.
It says the product is aimed to help around 15million Britons who hold excess cash to invest over the long term.
The launch comes as the Government is pushing more people to invest, as it hopes to achieve a ‘culture’ of investing in the UK and boost the economy. The campaign aims to bring £614billion worth of idle cash into the investment market.
Merve Ferrero, chief strategy officer at Zopa Bank said: ‘For far too long, Brits have been sitting on billions of cash – not because they don’t want to invest, but because they don’t know where to start.
‘Our customers already trust Zopa with over £6billion of their savings, and have been asking for a simple way to begin investing. Bringing Investments and stocks and shares Isa accounts alongside savings and cash isas under one Zopa roof gives our customers more financial control, all within a simple, education-led platform designed to build confidence and peace of mind.’
Zopa’s investment funds will be managed by Invesco, one of the world’s largest investment managers. Invesco’s 0.14 per cent fee is included in Zopa’s management fee.
Zopa, which has 1.6million customers in the UK, is FSCS protected, meaning that funds are shielded up to £85,000 if Zopa goes out of business. The FSCS protection limit is set to increase to £120,000 from 1 December.
Six months ago, Zopa launched its ‘Biscuit’ current account, marking its first banking venture outside of savings accounts. It launched a cash Isa back in March.
