Santander has cut the interest rate it offers to current account holders, and it could leave customers tens of thousands of pounds worse off. Customers who have a Santander Edge Up packaged bank account, which costs £5 a month, previously had a 2.5% interest return on any cash that was held in the account.
Holders also benefited from various perks, such as 1% cashback on selected spending categories, fee-free transactions abroad, discounts and freebies. However, from today (December 17), the interest rate has fallen from 2.5% to 2.1% on balances up to £25,000.
This means that if you maintain a balance of £10,000 in the account, the annual interest earned will decrease from £250 to £210, resulting in a loss of £40.
A Santander spokesperson told The Sun: “We regularly review rates in light of changing market conditions and offer a range of competitive current and savings accounts.”
Despite the bank’s interest rate cut, it remains the market leader in offering the highest interest rate to packaged bank account holders with balances exceeding £5,000.
Virgin Money also offers account holders earnings on their money. Those with a Club M account get 1% back on balances up to £1,000 and 2% on any linked saver balances up to £25,000.
Alternatively, Lloyds Bank’s Club Lloyds Silver account offers holders 3% interest on balances up to £5,000. The account also offers benefits such as travel insurances for just £11.50, making it a great option for those who priotise perks such as insurance over earning interest on their current account balance.
In other Santander news, the high street bank has confirmed the closure of 13 branches next year.
Regarding the upcoming closures, a Santander spokesperson told Express: “We remain committed to ensuring customers can bank with us through a range of channels, including in-person at branches and ATMs, or through our online, mobile and telephone banking services.
“Customers can also use over 11,000 Post Office branches for their banking needs, as well as Banking Hubs, given we are a member of Cash Access UK Ltd.”
