Digital bank urges high-street lenders to follow suit
Earn interest on Starling’s free account with no need to move money around
Customers to earn 3.25% AER / 3.19% Gross interest (variable)* on balances of up to £5,000
Rate automatically applies from 1st October and is paid monthly
London, 28 September 2023: Starling Bank will pay 3.25% AER / 3.19% Gross interest (variable)* on current account balances of up to £5,000 from 1st October 2023.
The move will mean that all personal and joint account customers earn interest on their balance without having to move their money into a separate account or dedicated pot.
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."
Starling will pay interest on positive balances, so customers’ money has earning potential whether they're holding money for day-to-day transactions or saving for holidays or heating bills. Interest rates apply to the first £5,000 in a customer’s account, inclusive of money held in Spaces and children's Kite cards connected to an adult account.
Customers with joint accounts will earn interest on joint balances of up to £5,000, as well as on balances of up to £5,000 in their personal current account. Most of Starling’s retail customers will benefit from the interest on the entirety of their current account balance, with 94% holding £5,000 or less.
Interest is calculated daily and paid monthly on the first day of the following month. The 3.25% interest rate is available to new and existing customers.