A new British bank has opened, offering an eye-catching savings rate of more than 2 per cent — with two catches: customers must lock away their cash for five years and must have a minimum balance of £25,000.
Monument Bank, which has been dubbed “the Monzo for millionaires”, has gone live with its first savings accounts, which are accessible only via a mobile phone app.
Chaired by Niall Booker, 63, a former chief executive of Co-operative Bank, it is aimed at the 4.8 million affluent Britons with between £250,000 and £5 million of wealth excluding their own homes. It estimates that potential customers in its target market have £6 trillion of wealth and £20 billion in cash deposits.
Monument, which secured its full licence to take deposits last month, is the brainchild of Mintoo Bhandari, 56, its chief executive and a former senior partner and head of India at Apollo Global Management, the private equity group. So far it has raised £60 million from wealthy individuals including Eric Zinterhofer, 50, a founding partner of Searchlight Capital, the private equity firm, and Harry Handelsman, 72, founder of Manhattan Loft Corp. One backer in its latest £20 million capital-raising, which is yet to close, is Grupo Security, a Chilean financial services firm.
The London-based company takes its name from The Monument, the Wren-designed tower in the City that commemorates the Great Fire of London.
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As well as transacting through the app, clients will have access to staff in a contact centre. The bank claims that it will reward loyalty by offering existing clients who renew a loan or savings product a better rate than that offered to new customers,
Moneyfacts said that the 2.05 per cent rate on Monument’s five-year deal put the savings product into the top ten for five-year fixed savings deals. “Savers who have a minimum of £25,000 to invest may find this deal enticing and be pleased to see more competition injected into the savings market,” it said.
Locking into a five-year fixed-rate savings product is a bet on inflation — at present 4.2 per cent — proving transient and official interest rates staying low.
The maximum deposit allowed by Monument is £400,000.
Monument also launched a two-year fixed savings product paying 1.5 per cent and a 12-month fixed paying 1.25 per cent.
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In addition, the bank plans to specialise in loans to professional and semi-professional residential landlords.
