A fixed-term savings account will offer a competitive rate over one to five years, and can be opened in seven minutes online.

The account will be protected by the Financial Services Compensation Scheme (FSCS) up to £85,000.

Zopa Bank will sit alongside its P2P lending business that was formed in 2005, as part of the overall Zopa Group.

There are 300,000 existing customers who have investments or loans with the company.

At the onset of the pandemic, the lender adapted its technology by introducing dedicated help forms, an income and expenditure tool, and a specific Covid-19 chatbot.

It has also worked closely with leading debt charity StepChange, by integrating the latter’s 60-second debt checker and benefit calculator into the bank’s app.

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The bank has raised £140m, its largest funding round to date, enabling its banking entity to fulfil its regulatory capital requirements. 

The investment has been provided by IAG Silverstripe Partners, an investment arm of IAG Capital, the private investment group specialising in digital and technology-led businesses.

IAG Silverstripe first invested in Zopa in October 2018. 

Jaidev Janardana, CEO at Zopa, commented: “Now more than ever the banking industry needs innovative, agile providers who work on behalf of customers.

“At a time when people want great value, fair financial services products, and simple, intuitive digital experience, [we] offer consumers a compelling and credible alternative they can trust. 

“Securing our banking licence enables [us] to play a wider role in the financial lives of our customers, as well as offering much needed choice and competition to the wider market.

“Beyond the current pandemic, Zopa is uniquely placed to provide a compelling alternative to traditional banking by leveraging its significant technological and financial services expertise to offer a wider range of great products, including savings and credit cards, alongside its personal loans and investments.”