Zopa shakes up Biscuit current account perks… but axes 7.1% regular saver: How does it compare?

The digital challenger bank Zopa has launched a choice of three new perks on its Biscuit current account.

These include a boosted 2.75 per cent interest rate on your current account balance and either 3 per cent cashback on eating out or the same amount on your bills.

At the same time, Zopa has cut the standard interest rate on current account balances from 2 per cent to 1 per cent and axed its 7.1 per cent regular saver for new sign-ups.

If you’ve already got the regular saver, you can still add and withdraw money. But at the end of its six-month term, your money will automatically move to an easy-access pot. This has an interest rate of 2.95 per cent variable.

If you’re an account holder, it’s wise to set a reminder for the end of the term and then shift your money to one paying a higher rate.

Despite the changes, Biscuit is still a pick of the week, according to rates scrutineer Moneyfacts. 

Caitlyn Eastell, a personal finance expert at the rates scrutineer, said the account is a ‘competitive option in the top 10 when compared to its peers’.

How do the new Zopa perks compare with before?

Taken on their own, the perks appear to offer higher value than before. But the fact you can only choose one makes the current account lose some of its lustre.

Previously, the account offered 2 per cent interest on current account balances for 12 months, a 7.1 per cent regular saver and 2 per cent cashback on direct debits up to £30 a year.

The regular saver boosted the value of the account. Paying in the maximum £300 a month would have given you around £137 after a year, and you only needed £125 of direct debits each month to hit the maximum cashback of £30 a year.

Now you can choose from one of these three perks:

• Uncapped 2.75 per cent variable interest on your current account balance, boosted from the standard 1 per cent
• Cashback on eating out of 3 per cent on up to £150 of monthly spending, capped at £54 a year – including restaurants, takeaways and bakeries
• Cashback on bills, also at 3 per cent on up to £150 of direct debits a month – capped at £54

Every Biscuit account holder also gets a free barista-made drink from Caffè Nero every month and fee-free spending abroad.

> Read more: Our pick of the best current accounts 

How do the perks stack up?

Interest on your balance is a nice bonus, but it’s wise not to hold too much money here – you can find much stronger rates in dedicated easy-access savings accounts.

A good option if you keep excess money in your current account is Spring’s Accelerate Saver, which pays 5 per cent on balances between £1 and £5,000.

If you have at least six months worth of emergency savings and are prepared to take on a degree of risk for the prospect of higher growth on your money, you could consider starting to invest. 

When it comes to cashback, higher rewards are available elsewhere – it’s possible to earn £240 back a year with Chase.

The challenger bank pays 2 per cent cashback on everyday spending – including groceries, restaurants, cafes, takeaways, transport, fuel and EV charging – up to £20 a month.

It requires at least £1,000 of spending a month to hit the maximum cashback, but the wide range of eligible transactions gives account holders a good chance of doing so.

You need to spend using your Chase debit card 15 times a month and have £1,000 in Chase savings accounts to qualify for cashback.

Savvy spenders who have the stomach for maintaining multiple accounts could combine them to maximise rewards – for example, holding a Zopa account for bills cashback and a Chase account for cashback on everyday spending.