Starling Bank boosts interest rate for current account holders
The new rate of 3.25% kicks in from 1 October for both new and existing customers.
Starling Bank is upping its interest rate for personal and joint current account holders to 3.25%, marking a dramatic rise from its existing rate of 0.05%.
To benefit, customers won’t need to commit to leaving their deposit with Starling for a certain time period, move money into a dedicated “Pot” or open a new savings account. Customers will simply earn 3.25% AER (variable) on all general balances of up to £5,000.
How the £5,000 limit works
If you have a joint account and an individual current account, you can earn the new interest rate on the first £5,000 in both accounts.
The £5,000 limit includes money in a main account, money set aside in “Spaces” and funds on children’s Kite cards that are connected to an adult account.
The new interest rate starts on 1 October and interest will be paid monthly on the first day of the following month. It’s available to both new and existing Starling customers.
John Mountain, interim CEO of Starling Bank, said: “Most banks with competitive interest rates require customers to move money into a separate account or pay a subscription fee. This friction means that many people won’t get around to taking action and so miss out on the interest on their main balance.
“We wanted to change this and ensure that everybody benefits by paying interest on the first £5,000 in their current account. This is something that all big banks should consider doing.”
Compare current accounts
Starling will pay gross interest, which means it doesn’t take off any tax that you might owe on interest you get. The amount of interest you can earn tax free in a year will depend on your own circumstances, including whether you’re a basic-rate or higher-rate taxpayer.
If you don’t want to earn interest on your account, you can opt out of interest payments by contacting Starling’s customer service team via the banking app.
To compare current accounts, you can use the table in our main comparison guide.