Starling Bank launches its first easy-access savings account – here’s how interest rates compare with competitors

Starling Bank will launch an easy-access account at the end of November, This is Money can reveal.

Starling’s easy-access account pays 4 percent and has no withdrawal restrictions – customers can withdraw money as often as they want without being penalized by a reduction in interest rates.

In recent years, many Best Buy ‘instant’ access accounts have come with hoops to jump through, including bonuses and withdrawal restrictions.

It is the first time that the digital bank has launched an easily accessible account. So far, Starling has only offered a one-year fixed-rate account, at an interest rate of 4.05 percent.

It comes as rivals Chase and Monzo revealed they will cut fares for easy access.

Chase will reduce its Easy Access rate to 3.5 percent from 3.75 percent today.

Meanwhile, Monzo has revealed it is cutting its easy access rate to 3.6 percent from 3.85 percent later this month.

Starling’s 4 percent interest rate is a variable rate, meaning it can go up or down with changes in the savings market.

This is Money analysis shows that 27 easy-to-access deals have seen rate cuts or been withdrawn from the market since the Bank of England cut the base rate last week.

Savers can get better rates than 4 percent if they shop around. Money’s best buy tables show there are easily accessible rates that pay as much as 4.9 percent.

Although they offer flashy rates, some of the best easy-to-access deals come with withdrawal restrictions, bonus rates that disappear when you withdraw money or a high minimum deposit of £25,000.

Starling’s 4 percent rate is competitive compared to other major providers.

Barclay’s daily saver pays 1.66 per cent, while NatWest’s flexible saver pays 1.6 per cent. Santander’s easy-access account pays 1.4 percent, while Lloyds’ easy-access account pays just 1.3 percent.

HSBC offers the highest rate among the big banks on easy-access savings at 2 percent, but this will be reduced to 1.7 percent on November 18.

There is a bonus version of the account that pays out 4 percent if customers don’t make withdrawals.

Starling’s easy-to-access account will appeal to savers looking for a high-interest savings account that can be easily opened and managed from their checking account.

The easy-access account will only be available to Starling’s sole current account customers at launch, not to joint account holders.

The easy-to-access account will be accessible from the ‘Spaces’ section of the current account.

It is open to new and existing customers, but new customers will need to open a current account with Starling as the easy-access account is linked to current accounts, just like Monzo’s piggy banks.

There is no minimum deposit required to start saving, and savers can deposit up to £1 million into the account – £85,000 of which is protected under the Financial Services Compensation Scheme.

Interest on cash held in Starling’s easy-access account is earned daily and paid out monthly.

Starling’s Maria Vidler says: ‘Easy Saver helps our customers with competitive interest rates, penalty-free access and full integration into their Starling app so they can see everything in one place.’