Fans of cheap energy could benefit from Eversmart Energy’s Family Saver Club, but you'll need to pay your annual energy bill up front.
An interest rate of 12% is better then you’ll get on any savings account – or even many investments.
Yet that’s what a challenger energy company is promising to pay its customers.
Eversmart Energy says that customers who are able to pay up front for a year's worth of energy will earn 12% interest on any excess credit left on their account.
More importantly, it also promises to provide the cheapest fixed-price energy deal in the market.
It says a typical dual fuel household will pay £973 a year, almost £50 cheaper than the next best deal on the market.
What's more, the energy it’s selling is 100% generated from renewable sources.
So, what’s not to like?
Compare the cheapest gas and electricity tariffs here
Family Saver Club
Eversmart’s deal is called the Family Saver Club.
Start by going online and getting a quote. We would recommend you also use a comparison site to get a second quote to check Eversmart is offering the best price.
Crucially, the Family Saver Club deal is only available for one year, after which point you're dumped on a variable tariff. So it's worth putting a note in your calendar to switch again in 12 months.
If you do find it is indeed the cheapest deal available, you'll need to opt to pay yearly and by direct debit.
You'll then have to pay for a year's worth of energy and, after 12 months, the direct debit will kick in and you'll see monthly payments taken from your account.
Of course, the amount you pay up front is estimated, so there's every chance you'll have paid the wrong amount.
If you've overpaid, you can rest safe knowing your credit is eaning a healthy rate: the interest you earn each month is based on the difference between the amount of gas and electricity you paid for and the amount you actually used.
If you've underpaid you'll have to pay the difference on the account in a year's time.
Is your money safe?
This year has already seen seven energy companies go bust, and it’s not completely clear what would happen to your money if the worst happened and Eversmart followed them.
Eversmart is not FSCS-protected; however, in past cases of energy company failure, Ofgem has stepped in.
When Spark Energy folded late last week, Ofgem told its 290,000 customers that “under our safety net we will make sure your energy supplies are secure and your credit balance is protected.”
Ofgem’s Safety Net covers your actual balance – but it doesn’t say anything about interest payments that are kept in a separate pot.
We’re chasing Ofgem for an answer on this, but until then don’t assume you’ll get more than your original payment back if Eversmart went under.
Energy rights: what to do if your gas or electricity company goes bust
loveMONEY’s verdict
If Eversmart is, as it claims, almost £50 cheaper than everyone else then this is a brilliant deal. The addition of a generous rate of interest on any credit on your account makes it even more appealing.
Sadly, not everyone will have the best part of £1,000 available to take advantage, but for those who do this is certainly a deal worth looking into.
Some might be nervous about locking their money away with a relatively small energy supplier given the carnage we've already seen in 2018, but Ofgem is unlikely to leave customers out of pocket if the firm does go bust.