(Reuters) - Stelios Haji-Ioannou, the founder of budget airline easyJet (EZJ.L), is launching an individual savings account (ISA) product in Britain under a new easyMoney brand, aiming to win business by offering better interest rates than banks.
Britain’s government and regulators are encouraging more banking start-ups to take on the “Big Four” banks that dominated high street lending, namely HSBC (HSBA.L), RBS (RBS.L), Lloyds (LLOY.L) and Barclays (BARC.L).
ISA savings accounts are tax free.
The easyMoney individual savings account aims to offer investors a 4.05 percent annual interest rate, compared to other similar easy-access cash ISAs which offer 1.21 percent interest. The returns are not guaranteed.
“Everyday investors in the UK have gone almost a decade without real interest rates,” Stelios said. “With the easyMoney Innovative Finance ISA, we’re offering something new and taking on the big boys.”
Cash invested in the easyMoney ISA will be put into loans secured against British property, easyMoney said. That could make the ISA riskier than some bank offerings, where cash is typically put into stock and bond portfolios.
“The inflation-busting interest rates we target are streets ahead of anything the banks could contemplate,” easyMonday CEO Andrew de Candole said.
Stelios, 51, the son of a shipping magnate, also owns the easyHotel (EZH.L), easyBus, easyCar, easyProperty, easyOffice, easyFoodstore, easyCoffee and easyGym brands through his private investment vehicle, easyGroup, based in Monaco and London.
Reporting by Noor Zainab Hussain in Bengaluru; Editing by Edmund Blair