Actually that is not correct. I have seen speculation that the Trust Bonds are mini-bonds but this is not the case.
These retail bonds are listed by us, but in this case we are not using the money invested for any activity - whether operating costs or investment. It is being kept apart in a trust for the benefit of customers. It is a way of rewarding our customers and funded by us (as has been pointed out) and although this costs us money, it can be subsidised (in our case) by other revenue generation activities. I can’t comment on how others might be funding their offers.
The value of the money in these accounts to dozens is not the cash itself, but the fact that customers are joining dozens and exploring our app, our savings (not spending or borrowing) concepts, and looking at the opportunities for savings and investments.
This is primarily aimed at being a regular savings vehicle rather than a “free money” bonanza for those with existing saving pots. Regular savers will not have thousands of pounds to move into savings every month, so we want to make sure we reward this behaviour and have the ability to offer it consistently each month. Having said that, the March bond issuance will be for a total of £1m - so there will be something for a lot of people.
It would, of course, be nice to get 5% fixed-interest on £50k+ pots of savings for virtually no risk, but that couldn’t last (as has been pointed out). Of course it is possible that you could get this, because of our bid model, just as it could be possible to get a Banksy artwork for a bargain at an auction if no-one else turns up to bid. You never know
If you have larger savings pots there will soon be other bonds and investment options available for you to choose from for a range of risk appetites, including very low risk.
We are in this for the long term with our customers so this Trust Bond is an investment, but a sensible one.