Ban confirms anyone with account could lose out after rates reduced
Santander is set to cut a popular current account benefit in a matter of hours, leaving customers at a disadvantage. The high street bank will reduce the interest rate offered to current account holders from tomorrow (December 17).
At present, customers with a Santander Edge Up packaged bank account – costing £5 per month – receive a 2.5% interest return on any cash held in the account. Alongside this, account holders enjoy a variety of benefits, including 1% cashback on selected spending categories, no-fee transactions abroad, in-app money management tools, and various discounts and freebies.
However, the interest rate on the account will drop from 2.5% to 2.1% on balances up to £25,000 on Wednesday. This adjustment means that if you consistently keep a balance of £10,000 in the account, the annual interest earned will decrease by £40 – from £250 to £210.
A spokesperson for the bank stated: “We regularly review rates in light of changing market conditions and offer a range of competitive current and savings accounts.”
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Santander isn’t the only bank offering credit interest on balances held within its packaged bank account. Lloyds Bank provides Club Lloyds Silver account holders with 3% interest on balances up to £5,000.
Meanwhile, Virgin Money Club M customers receive 1% back on balances up to £1,000 and 2% on any linked saver balance up to £25,000. Despite Santander’s impending rate reduction, it continues to lead the market in offering the highest interest rate to packaged bank account holders.
Account holders with balances of more than £5,000. However, for those who prioritise perks like insurance over earning interest on their current account balance, Club Lloyds Silver offers a better alternative, providing travel insurance and other benefits for just £11.50 per month.
Meanwhile the bank is offering people a free cash bonus payment of £200 – but only if they’re prepared to switch their banking from a high street competitor. These promotions appear regularly as banks seek to grow their customer base throughout the UK.
Santander has 14 million active UK customers, with seven million customers who bank online exclusively. Both new and existing customers could potentially receive this £200 reward after transferring their current account via the Current Account Switch Service to a Santander Edge account.
People would need to make sure that they meet the criteria for the offer before making any significant financial moves. The promotion was flagged by Martin Lewis ‘ MoneySaving Expert team online as one of the leading switching offers currently available (at the time of writing).
The MSE page states: “For a £3/month fee, the Edge current account pays one per cent back on energy, council tax, broadband, TV, mobile & water bills (max £10/mth), making it a top bills (or joint bills) account.
“The Edge Saver pays six per cent on up to £4,000 for the first year – maxed out, that’s around £240/year interest. Plus, the Edge debit card also has no foreign exchange fee when you spend abroad, so you get the same near-perfect exchange rate as the bank does.”
Following confirmation of eligibility, the £200 payment will be transferred directly into your Santander account within 30 days. The bonus won’t arrive in time for Christmas
