The UK’s first Internet only bank officially opened its doors for business this morning.
First-e is the result of a cooperation between Banque d’Escompte, a private French bank and a heavyweight group of international companies including Intel, Morgan Stanley Dean Witter and venture capital firm Apax Partners.
First-e is launching with a basic savings account which gives consumers 24-hour online control of their money including account management, cash deposits and withdrawals. There is no minimum deposit and interest is accrued daily and paid monthly.
Interest is paid at a rate of 5.9 per cent before tax, no matter what the balance. This rate beats every other bank and building society in the UK on low balances.
The Internet bank is expected to launch a loyalty scheme in the coming months which will reward people with an increased interest rate for introducing family and friends to First-e. A share dealing and current account will also be available before the end of the year. Next year First-e is looking to introduce a mortgage and investment planning service.
"We are keen to pass on to our customers all of the cost saving benefits of not having to support a branch network," said Xavier Azalbert, head of First-e. "For starters, we're able to meet consumers' requirement for convenience, high interest rates and free banking with no hidden costs."
First-e is operating a support call centre facility as a fallback option for customers who cannot get an Internet connection for some reason.
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