Foreign bank offers 6.5% to online savers

A new online savings account has been launched to target British savers.

Icelandic-owned Kaupthing Edge has become the latest foreign bank to introduce a savings account aimed at British people.

The news follows several foreign banks entering the British market including Nigerian-owned FirstSave, Icelandic Icesave, ICICI of India and Dutch-owned ING Direct.

Kaupthing operates in 13 countries including Denmark, Finland and Sweden with its headquarters in the Icelandic capital, Reykjavik. However, like the majority of the banking industry it has been affected by the credit squeeze.

In the last few months, its share price has fallen by 30%, consequently, it is on the lookout for retail customers to boost its funds.

Kaupthing Edge’s instant-access savings account pays 6.5% gross and offers a 6-month fixed-rate bond at 6.8% gross and a 12-month fixed-rate bond at 6.86% gross.

A minimum of £1,000 must be deposited in the instant-access account before savers can take advantage of Kaupthing’s fixed rates. For a fixed-rate bond, the minimum investment is £5,000.

A spokesperson for moneysupermarket.com, the price comparison site, said Kaupthing’s launch is good news for savers, particularly at a time when the Bank of England looks set to cut interest rates again.

The spokesperson added that in recent years, the savings landscape has changed significantly, with new foreign banks including ING Direct and Icesave changing the contents of the best-buy tables. Savers are definitely benefiting from the competition.

Kaupthing is regulated by the Financial Services Authority and should the bank run into difficulties, savers’ cash up to £35,000 is protected under the Financial Services Compensation Scheme.

For more details, visit kaupthingedge.co.uk.

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