With interest rates returning to historic norms, persistent inflation and increasing technology adoption, consumers are exploring more non-traditional savings options.

There is a major opportunity here. More companies are choosing to leverage this rise in demand by embedding savings accounts into their products to increase revenue, win more customers and enhance the overall customer experience.

In this blog, we explain the concept of embedded savings, the kinds of savings accounts that companies can embed, and some potential use cases.

What is embedded savings

Embedded savings are savings products that companies can integrate directly into their existing product. These products can take the form of traditional savings accounts e.g. Monzo offering savings products from OakNorth in its banking app to smaller, white-labelled savings pots built into all kinds of apps and platforms like Income Group offering Griffin savings accounts in the IGsend app.

Embedded savings products provide a number of benefits including:

• Product diversification and increased user engagement/stickiness to improve your overall customer experience.
• Cross-sell opportunities (Savings as an entry point). Savings accounts can serve as a key entry product for your offering‍—‌customers are familiar with savings and you can leverage this to introduce them to other products.
• Additional revenue stream. Companies have an opportunity to earn commission from the interest generated on savings.
• Differentiation from competitors. You can stand out from the competition with a richer differentiated product offering.

Savings products have the ability to fit into a wide range of business models and customer journeys. Here are some examples:

Use cases for embedded savings

• E-commerce. E-commerce and retail merchants can incentivise customers and increase loyalty with embedded savings. An example is savings-as-a-reward‍—‌actual cash deposited into a savings account on every purchase which customers can decide to use to buy another item or withdraw after a stipulated period of time. Customers can also save directly into these accounts for future purchases.
• Payroll: Embedded savings accounts in payroll are gaining huge momentum. These accounts can help employees manage money and improve their financial health by allowing them to automatically set aside a portion of their salary each month.
• Proptech. Huge investments like buying a home are great use cases of embedded savings. Proptech companies can embed savings accounts into their apps, allowing customers to automatically save for home deposits. They can also boost loyalty by offering incentives like discounts on related services e.g. insurance if these are bought through the savings program.
• Pensions (retirement savings): Embedded savings are great alternative products that pension providers can offer. This is a way for them to diversify their products and earn revenue on cash that their customers want to put away for short periods.
• Wealth, savings and investment apps: As the name suggests, embedded savings are one of the core products of savings and investment apps. Their automated and customisable nature makes it easy for users to put away money for future purposes. Some users want to be able to access cash at any point and will prefer simple savings products with ease of withdrawal.
• Insurance: Companies in this space can offer savings products alongside key personal insurance offerings like life, property and travel insurance. For example, an insurance company can offer a savings pot for a future trip with competitive interest rates that you unlock based on the tenure of the travel insurance plan you buy.
• Utilities. Utility providers can offer savings features in their apps, e.g. an energy provider can automatically place the net positive difference between the cost of energy consumed and the monthly charge a customer pays into a savings account for the customer.

Types of savings accounts products

Embedding savings is a powerful tool for companies who want to increase retention and revenue. However, as firms embrace these integrated financial products, it's important to prioritise transparency, regulatory compliance, and consumer protection.

Only licensed banks and building societies can offer savings accounts with interest and companies who want to offer savings products must partner with them (directly or via a distributor) to do so.

Depending on your banking partner, you can choose to embed any of these savings products:

• Instant access or easy access savings accounts: An instant access savings account offers the end user the flexibility to deposit and withdraw funds at any time without penalties, while still earning interest on their balance. An easy access savings account may not offer instant withdrawals, but typically make funds available on the next working day.
• Notice accounts: A notice savings account requires advance notice for withdrawals, usually 30 to 180 days. This account will typically offer higher interest rates than instant or easy access accounts but less flexibility. Notice accounts are great for end users who can commit to more medium-term savings but do not want to take on the rigid structure of fixed-rate bonds/term-deposits and the easy liquidity of instant access accounts.
• Term deposit accounts: These accounts are great for consumers who want longer term commitments. With term deposit savings accounts, you get higher interest rates on money put away for a longer period of time (typically 6, 12, 18 or more months) with no access to withdrawals until the period elapses.

Embedding Griffin savings accounts

Griffin offers savings accounts that companies can easily embed into their existing products and earn a commission while their customers earn interest (see our pricing page). Eligible deposits in these accounts are protected by the Financial Services Compensation Scheme (FSCS) for up to £85,000 per depositor.

Our easy access savings accounts allow you to provide individual savings accounts per customer, simplifying your reconciliation process. For companies with their own ledger systems, our Bare trust savings accounts offer more flexibility. These accounts allow you to manage individual customer balances and interest income yourself. With a bare trust structure, you can hold funds on behalf of multiple customers, with the trust as the beneficiary.

Thinking of offering savings accounts? Let us know here and a member of our team will be in touch.