Standard to pay commission on deposit account

Standard Life Bank is to offer the first deposit account paying commission to IFAs.

The bank, which launches on January 5, will pay IFAs a cash equivalent of 0.2 per cent of deposits for six months. The commission rate will then drop to 0.1 per cent.

The move is a bid to create a major telephone banking division to rival the big high-street banks. Standard Life hopes to take £1bn in deposits in the bank&#39s first year of operation.

Standard claims it will offer aggressive interest rates aimed at beating supermarket rivals. The bank also aims to offer mortgages and loans within the next six months.

Its first savings account, Direct Access Savings, will allow up to six people to pool finances in a single account to take advantage of higher interest rates. There will be no minimum cash deposit or withdrawal restrictions.

For £1,000 deposit, the interest will be 6.9 per cent compared with 6.5 per cent from Sainsbury and Tesco and 3.75 per cent from Halifax&#39s Liquid Gold account.

For £10,000, Standard&#39s rate rises to 7.26 per cent, beating rates of 6.5 per cent from the supermarkets and 4.3 per cent from Halifax.

Standard Life Bank managing director Jim Spowart says: "Unlike most other direct operators, we are able to sell products through IFAs and therefore do not incur heavy advertising costs."

The bank has recruited 100 staff to deal with an estimated average of 3,000 calls an hour.

Other life offices, including Prudential and Scottish Widows, have launched banking operations in a bid to hold on to policyholders&#39 maturing money. Standard, which pays out £911m a year on maturing endowment policies, claims its banking push is aimed at taking on the big banks, building societies and supermarkets.