Squirrel, the mortgage company, has launched a new enhancement to its peer-to- peer term investment platform, that will offer a higher “no strings attached” interest rate than any equivalent savings account in the Kiwi market.
At launch, the new Squirrel On-Call account will offer an interest rate of 3.50% annually. Unlike other higher-interest saving options, account holders aren’t penalised with lower rates if they make a withdrawal or don’t deposit funds during any given month.
Squirrel CEO, David Cunningham, says the launch is part of the company’s mission to upend the current state of play within our banking system, which has seen Kiwi savers forced to accept stingy returns for far too long.
“Recent data from the Reserve Bank shows that there’s about $78 billion of Kiwi savings in accounts earning an average of 1.94% returns a year. That’s a lot of money sitting there doing next to nothing for the people who have worked so hard to save it.
“Over the last 12 or so months, we’ve all watched as the official cash rate (OCR) has just gone up and up and up. Mortgage rates have followed suit, of course, and so the question we’re asking – and encouraging Kiwi to be asking as well – is why haven’t savers benefited in quite the same way?
“Squirrel is here to challenge that,” Cunningham said.
The account is linked to Squirrel’s peer-to-peer term investment platform, with On- Call funds held on trust with a major New Zealand trading bank, and Squirrel passing interest earned direct to savers.
The interest rate on the On-Call account is variable.
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