- Starling Bank offers 3.25% interest.
- Competing with traditional banks.
- Aims to attract and retain.
Tomorrow, Starling Bank current account holders can earn £13.54 monthly on deposited currency. The bank will pay 3.25 percent interest on balances up to £5,000 for customers.
Starling extends this offer to personal and joint accounts, along with connected Kite debit cards for minors. Account holders with a maximum balance of £5,000 could receive £162.50 annually or £325 for joint accounts.
This interest rate is applied automatically and paid monthly, with the Financial Services Compensation Scheme safeguarding balances up to £85,000. Starling expects most customers to benefit, as 94% hold less than £5,000.
“Ready to invest smarter? Secure your free Webull shares in the UK now.”
Starling is urging traditional banks to adopt similar practices. Other banks like Nationwide offer 5% interest on up to £1,500 in balances, but this rate decreases to 1% after a year. The lesser-known Digital Bank Kroo offers 4.35% interest on balances up to £85,000, but this rate may decline starting in October.
Personal finance expert Andrew Hagger believes Starling aims to reward and retain existing customers while attracting new business with this competitive interest rate. This move could help win back customers and boost loyalty in response to a decline in net switching customers observed earlier this year.
Overall, Starling Bank’s new interest offer aims to entice and retain customers through attractive credit interest rates, potentially influencing bank switching decisions.
