Tandem adds fixed savings accounts

Tandem, the U.K. challenger bank founded by fintech veteran Ricky Knox, has rolled out its second banking product today with the addition of fixed term savings accounts. The new offering enables customers to get a guaranteed interest rate if they deposit their money with Tandem over one, two or three years, and follows the launch of the Tandem credit card in February.

The fixed savings product itself looks pretty competitive and pits Tandem against a whole host of incumbent and challenger banks. The interest rate starts at 1.8 percent for a one year deposit, all the way up to 2.3 percent if you commit to three years. A minimum of £1,000 must be deposited.

As a comparison, Atom bank currently offers 2.15 percent for a three-year fixed saver and only matches Tandem if you deposit for five years. It will also be interesting to see how much competition surfaces once Raisin, the savings deposit marketplace, launches in the U.K.

Like many other consumer-facing fintechs, Tandem wants to become your financial control centre from which it can connect to and offer various financial services. These are either products of its own, such as the new savings account or credit card, or through partnerships with other fintech startups and more established providers.

At the heart of this is the Tandem mobile app, which acts as a Personal Finance Manager (PFM), including letting you aggregate your non-Tandem bank account data from other bank accounts or credit cards you might have, in addition to managing any Tandem products you’ve taken out. The company recently acquired fintech startup Pariti to beef up its account aggregation features.

Meanwhile, the addition of a fixed savings product shouldn’t come as surprise to anyone who has been following the Tandem story. Last year the self-described “Good Bank” acquired the banking arm of the famous Harrods department store partly in order to get its banking license back on track, and Harrods Bank was already in the deposits businesses. Having a banking license and a large amount of deposits on its balance sheet also sets Tandem up to begin balance sheet lending, which would begin to form the basis of a proven banking business model.

The challenger bank says it is also working on a second Tandem card, which I understand will be a debit not credit card, and therefore act more like a current account. It is also working on an instant access savings product to complement the newly launched fixed term savings account.