Bank makes unwelcome change as it axes popular feature and payouts drop (Image: Getty)
Starling Bank has axed the 3.25% on its current account, a popular feature amongst its 3.6 million customers.
The change took effect on Monday, February 10, ending the opportunity for customers to earn interest on funds in their current accounts.
Prior to this, the digital bank offered 3.25% interest on balances up to £5,000, allowing customers to earn an additional £162.50 per year at the maximum. However, this feature is no longer available.
Instead, the bank launched an easy access account with a 4% Annual Equivalent Rate (AER) on deposits of up to £1million.
Like other traditional easy access accounts, savers can access and withdraw money when they need to without incurring a penalty.
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Millions of customers will no longer benefit from the interest payments. (Image: Getty)
A spokesperson said: “We regularly review our products so we can be the best bank we can be and help our customers achieve their financial goals. Whilst we’ve removed the interest on current accounts – which was notified to customers in November 2024 – customers can still benefit from the other award-winning current account features.
“We learned from our customers that what they wanted was a separate account for their savings. So, we launched our easy saver, which enables them both to earn interest on bigger balances and to move their money without penalty.”
They added: “All Personal Current account customers can apply for an Easy Saver account. However, opening an Easy Saver account is subject to meeting eligibility criteria.”
Alastair Douglas, CEO at TotallyMoney, noted that while customers can benefit from higher returns with Starling Bank’s new savings account, they’ll need to manage their accounts strategically to maximise these benefits.
He said: “Starling regularly tops the polls for being one of the best British banks and has seen consistent growth in the current account market with 3.6 million customers now holding £11billion in deposits. The good news for die-hard Starling fans is that the bank has launched an Easy Saver, which gives customers unlimited access to their funds, with an of 4.00% AER on up to £1million.”
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He noted: “That way, you can still use the Starling account day-to-day, but you’ll just have to be a bit more savvy when it comes to moving your money between accounts to get the most out of the bank.”
While the bank no longer offers an attractive on its current account, it does have other redeeming features.
For example, customers can benefit from fee-free spending abroad. They can also use virtual jars, called “spaces,” to organise their money into different savings pots to better budget.
People can also opt-in to ‘round-ups,’ which add spare change to their “spaces” jars to boost savings.
The bank offers an entirely digital experience, providing only in-app access and monthly spending insights. Those looking for bricks and mortar may want to look elsewhere, as no physical branches are available.