Chase stopped paying in-credit interest on current accounts for all customers this week, after confirming the move back in June.
It comes just over a year after the app-only bank introduced the 1% interest on current accounts in April 2023.
In June, as part of the announcement, Chase said the move came as it continues to offer customers products and features “best suited to their needs”.
It limited the blow by offering a boosted bonus rate (to 5.1%) on its easy-access saver account (now withdrawn) for a six-month period.
While the attraction to Chase is perhaps more to do with the rates offered on its easy-access savings rather than the now-axed 1% on its current account, it was better to earn something rather than nothing on cash deposits.
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However, if you are looking to earn in-credit interest on your cash holdings, these are the top three payers, according to Savings Champion data:
1) Nationwide FlexDirect Account
You can earn up to 5% AER (4.89% gross per year) by switching your current account to the fee-free Nationwide FlexDirect Account via branch or online.
This rate is available for the first 12 months on a maximum of £1,500, and you need to pay in £1,000 per month to get it.
After 12 months, the rate reverts to 1% AER variable.
The account offers an interest-free arranged overdraft for 12 months, after which the interest rate stands at 39.9% per year compounded (variable).
2) Kroo Current Account
Challenger bank Kroo offers 4.1% AER (4.02% gross) on its current account, which can be opened and managed via mobile.
It may be a lower rate than Nationwide, but it’s calculated daily and paid monthly on cash holdings up to £500,000.
However, be mindful of the Financial Services Compensation Scheme (FSCS) limit, which protects up to £85,000.
It’s also important to note that the interest rate offered is a ‘tracker’ rate fixed at 0.9% below the Bank of England’s base rate. This means if the Bank of England base rate goes up or down, your interest rate will increase and decrease in line with this 0.9% margin. Just last week, the base rate fell from 5.25% to 5%, meaning Kroo adjusted the rate offered to savers.
Customers also receive zero fees on purchases abroad and you can shop anywhere where Visa is accepted.
Meanwhile, it runs a single 24.9% EAR/APR representative (variable) on overdrafts, subject to eligibility and by “invitation only”.
3) Santander Edge Up
The Santander Edge Up current account pays 3.5% AER and can be opened online and in branch.
The biggie here is that it costs £5 per month, but allows you to earn interest on balances up to £25,000 – that’s up to £71.77 every month.
Plus, you also earn 1% cashback (maximum £15 per month) on selected household bills and 1% back (up to £15 per month) on essential spending such as the grocery shop and travel.
You need to pay in £1,500 per month and set up two active direct debits to get the full benefits.
Santander has a handy tool to help you work out how much in interest and cashback you can earn by plugging in a few numbers.
