Octopus Cash sees surge in new deposits amid the coronavirus crisis

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Savings marketplace Octopus Cash, which belongs to the UK-based financial services company Octopus Investments, revealed that it received £10.4 million ($12.8 million) of new deposits in the week starting March 16, per the FTAdviser.

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This led to a record-breaking quarter for the fintech, with £44 million ($54 million) being funneled into the platform in Q1 2020. The average saving size increased 26%, from £133,000 ($163,783) to £166,000 ($204,421) in March. Consumers can either set up a savings account via Octopus Cash’s website directly or go through their financial advisor. Of note, Octopus Cash has also seen a significant uptick in the number of advisors using the platform for their clients.

By using Octopus Cash, consumers can access a variety of savings products, ensuring they get the best interest rate. Octopus Cash operates a savings platform that helps consumers find the best interest rate for their money. It does this by teaming up with various banks, many of which are smaller challengers offering better interest rates than high street banks, including OakNorth, Metro Bank, and Shawbrook Bank, to give Octopus Cash users access to their savings products.

Octopus Cash offers 6-, 12-, 18-, and 24-month fixed-term accounts, and at the end of each term, users are automatically offered the best available interest rate. Users can switch accounts without having to make a new account, and funds of up to £85,000 ($10,4673) are covered under the UK’s Financial Services Compensation Scheme (FSCS). Users aren’t charged for using Octopus Cash, but rather, the fintech charges its partner banks an admin fee between 0.15% and 0.30%.

Consumers are likely more wary of investments at the moment, leading many to put their money with less risky options like high-yield savings accounts — a trend that will continue to benefit savings platforms during the pandemic. The global stock market has been highly volatile since the outbreak of the coronavirus — with stocks last month seeing the worst week since the 2008 financial crisis, making it riskier to invest in stocks and shares at the moment.

This uncertainty regarding the market is likely why consumers are seeking less risky alternatives to make a return on their money, such as high-yield savings accounts. We expect savings platforms to continue to benefit from this trend, with demand accelerating during the pandemic. That said, banks have cut already-low interest rates during the crisis, and Octopus Cash should further build out its network of alternative savings providers to ensure that it can continue to offer its users attractive rates for their savings.

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