A German savings startup backed by Peter Thiel just passed €1 billion in deposits

A German fintech startup that lets people access the best interest rates from multiple banks without having to open up new accounts with each lender has passed €1 billion in deposits on its platform.

Deposit Solutions announced on Tuesday that it had reached the milestone in just 13 months through its customer-facing operation ZINSPILOT. Savers are investing €100 million a month over its platform, the company says in a press release. 35,000 customers have registered for ZINSPILOT since it launched.

The announcement comes less than a month after Raisin, a rival German startup that also offers pan-European savings accounts online, announced it had hit €1.7 billion in savings over its platform.

Deposit Solutions lets people take advantage of the best interest rates from different banks through one account.

Here's how it works: imagine Bank A, which offers a 2% savings account, has money sitting on its balance sheet that it doesn't need right now. Bank B, meanwhile, offers a 5% savings account but needs more money. Deposit Solutions platform lets Bank A say to its customers, hey, we'll give you Bank B's 5% rate on our account. Bank A then lends Bank B the money it needs behind the scenes and Bank B agrees to make good on the 5% interest in exchange for the funds.

It's win, win, win: for the customer, you get Bank B's juicy 5% rate without the hassle of opening another account; for Bank A, they get a happy customer who, hopefully, is less likely to leave; and for Bank B they get access to capital.

Max von Bismarck, Chief Business Officer for Deposit Solutions, says in an emailed statement: "We are seeing continued demand both from banks looking to offer their clients higher yielding deposit products and banks wanting to raise deposits through our platform."

Deposit Solutions says in a release on Tuesday that customers on its platform have had an average daily interest rate of 1.26% in 2016, above the European average of 0.26%.

Hamburg-based Deposit Solutions is backed by, among others, Peter Thiel - the Silicon Valley billionaire who cofounded PayPal and was an early investor in Facebook. Thiel has taken part in two funding rounds for Deposit Solutions, most recently a €15 million (£12.5 million, $16.5 million) in July.

Dr. Tim Sievers, CEO and founder of Deposit Solutions, says in an email: "This is an important milestone for the business in a number of ways. The successful funding round in the summer illustrated investor confidence in the business, but these latest figures show the business's continued success in practice."

Thiel's support for a Donald Trump Presidency has attracted some controversy in the US, with Bloomberg reporting that a seed fund in Silicon Valley rejected an investor because of ties to Thiel.