Currently, Starling pays its customers an interest of 3.25% on current account balances up to £5,000 and this feature gives customers with more than £5,000 in their account an extra £162.50 in interest earnings
Starling Bank is scrapping one of its popular current account features for its 3.6million customers.
The digital bank will stop paying its customers interest on their current account balances in the new year reports This is Money. Currently, Starling pays its customers an interest of 3.25% on current account balances up to £5,000. This feature gives customers with more than £5,000 in their account an extra £162.50 in interest earnings.
Starling increased its interest rate to 3.25% in September last year, and it has remained the same since. However, from February 10 next year, this feature will be removed entirely from all accounts. Starling said it had contacted all current account holders over the last two weeks about the change. Current account holders will continue to benefit from the feature until the change.
A spokesperson for Starling Bank said: “We continually keep our products under review and have taken the decision to remove current account interest from February 10, 2025 Over the last couple of weeks we have notified all customers of the new current account terms and conditions in the Starling app. Customers will still benefit from fee free spending abroad and 24/7 customer service.'”
Starling will soon be launching a 4% easy-access savings account at the end of this month. This is the first easy-access savings account offered by the digital challenger bank. Up until now Starling has only offered a one-year fixed-rate account paying 4.05%.
The new savings account is to be linked to the standard Starling current account, and some customers have been able to open one from the start of this week. When it launches, the account will only be available to Starling’s sole current account customers, not joint account holders. Starling’s 4% interest rate is also variable, which means it could go up or down depending on the markets and the Bank of England’s base interest rate.
Last month, the Central Bank cut its base rate for the second time this year from 5% to 4.75%. Since the cut, more and more banks have opted to cut the interest rate they offer on their savings accounts. The Bank will be meeting again in December to decide whether another cut is viable. If it does cut rates again, it is likely many banks will drop its savings rates even further.
