Zopa's new current account pays 2% cashback – does it take the 'Biscuit'?

What Zopa Biscuit offers

Zopa has offered loans, credit cards, car finance and savings for years – but Biscuit is its first foray into current accounts. Here are the key features of the new account:

• A table-topping linked regular saver paying 7.1% variable for a year. You can pay in up to £300 a month. Maxed out, that's £137 interest, assuming the rate doesn't drop before the end of the 12 months. You can skip months if you need to and make unlimited, penalty-free withdrawals. For comparison, the next best linked regular savers currently pay 7%.

• 2% cashback (max £30 a year) on Direct Debits. You can get 2% back on the first £1,500 of Direct Debits you pay out in a year. Unusually, this ISN'T limited to specific bills – Zopa told us all Direct Debits count (but NOT recurring card payments, such as the ones used by streaming services, among others).
  
  Zopa doesn't support the official Current Account Switch Service right now, so you'd need to set up your Direct Debits manually to get the cashback.

• 2% fixed interest for 12 months on money you keep in the account. A few other current accounts also offer in-credit interest – but you can earn much more by moving any extra cash you have into a savings account each month. Easy-access accounts, which let you withdraw money whenever you need to, currently pay up to 4.92%.

• Fee-free spending abroad. You can withdraw up to £200 in cash while abroad in a 30-day rolling period fee-free. For anything over that amount, a 2% fee will apply in future (Zopa says it's not applying this fee yet but it'll let customers know by email or in the app once it's introduced).

• It’s free and easy to get. You can open the account for free using Zopa's app (it's on iOS and Android). Unlike most other current accounts, there's no hard credit search to open Biscuit (so it won't affect your credit rating). There's also no monthly fee and no minimum monthly pay-in. And you don't need to switch to get it.

Note: These perks are likely being used to draw in customers for the launch and could be reduced over time (as we've seen with other accounts) – though Zopa told us it had "no plans to change them in the foreseeable future".

How Zopa Biscuit compares to its closest rivals

No other bank accounts currently offer exactly the same combination of perks as Zopa Biscuit. But you can earn more elsewhere if you're willing to switch and/or you have big monthly bills:

• Santander Edge – FREE £180 to switch, plus 1% bills cashback (max £120 a year) and 6% easy-access saver. For a £3 monthly fee, the Edge account pays 1% cashback on bills, specifically water, energy, Council Tax, mobile, broadband, phone and paid-for TV bills. But the cap on this is much higher than Biscuit's – you can earn up to £10 a month (£120 a year), versus £30 a year with the Biscuit account.
  
  Factoring in the fee on the Edge account and the cashback caps on both, Biscuit wins if your Direct Debits are under £550 a month, while Edge wins for bills above this amount (provided they're within the allowed categories). However, the Edge account also currently pays newbies £180 to switch, and comes with a linked easy-access saver paying 6% on up to £4,000.

• First Direct 1st account – FREE £175 to switch, plus top service, fee-free spending abroad and 7% regular saver. There’s no bills cashback here, but the other perks make it a very strong all-rounder for newbies switching to it. The regular saver is fixed at 7% for a year on up to £300 a month (maxed out, that's £136 a year in interest), plus there's an ongoing £250 0% overdraft for many. On top of that, it's a top overseas debit card, so you get near-perfect exchange rates.

• NatWest Reward – FREE £125 upfront, plus £50 to open 5.5% interest linked regular saver, and £36 a year cashback. This account costs £2 a month but you get £5 for each month you pay in £1,250, pay out two-plus Direct Debits of £2-plus and log into its mobile banking app each month. So the net gain is £3 a month or £36 a year. Maxed out, its 5.5% variable interest saver (on funds up to £5,000) nets you £54 after one year, plus you can currently get £50 just for opening it as part of its switch offer.

For lots more options, see our Best bank accounts guide.

Combine Biscuit with other accounts to max your returns

It might sound obvious, but you don't need to stick to a single current account (or savings account, or credit card). As outlined above, for most people wanting to earn bills cashback, Santander Edge is likely to win. But because it's easy to get, Biscuit could be a good option if you combine it with other accounts. Here are a few other tasty pairings to consider:

• Zopa Biscuit, plus any of the options above. This way, you can get a switch bribe, plus the Biscuit perks.

• Zopa Biscuit, plus the Chase debit card. Chase, another easy-to-get current account, pays 1% cashback on most grocery, transport and fuel spending (up to £15 a month). So you could use Biscuit to earn cashback on Direct Debits and use the Chase card for your everyday spending to max your cashback earnings. Though, as we mentioned above, the Santander Edge account beats Biscuit if your bills are over £550 a month, so you'd be better off pairing that with Chase instead.

• Zopa Biscuit, plus a top cashback credit card. Unusually, Biscuit doesn't restrict Direct Debit cashback to specific bill types. This means you could do your everyday spending on a top cashback credit card earning up to 5% back, then set up a Direct Debit to pay it off IN FULL from your Biscuit account – stacking the rewards (though don't use this as an excuse to overspend).

• Zopa Biscuit, plus a top easy-access savings account. The best easy-access savings rates are currently offering just under 5% interest. The rates are variable but you can dip in and out of your savings, sometimes a limited number of times a year but often it's unlimited. It's an easy way to make the most out of money you know you can set aside for the short-term, with the flexibility of withdrawing at short notice, at much better rates than Zopa's in-credit interest.