SANTANDER is making a major change to a popular bank account used by thousands of customers, The Sun can reveal.
The high street bank is slashing the interest rate offered to current account holders from April 28.
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Currently, customers with a Santander Edge Up package bank account – priced at £5 per month – enjoy a 3% interest return on any cash held in the account.
In addition to this, account holders benefit from a range of perks, including 1% cashback on select spending categories, fee-free transactions abroad, in-app money management tools, as well as various discounts and freebies.
However, the interest rate offered on the account will fall from 3% to 2.5% on balances up to £25,000 later on this month.
This change means that if you consistently maintain a balance of £1,000 in the account, the annual interest earned will decrease by £5 – from £30 to £25.
A spokesperson for the bank told The Sun: “We regularly review rates in light of changing market conditions and offer a range of competitive current and savings accounts.
“As such from April 28, 2025 we will be reducing the in-credit interest on the Santander Edge Up to 2.5% AER (variable) on balances up to £25,000.”
Virgin Money’s M Club packaged bank account provides 1% interest on balances up to £1,000.
Despite Santander’s upcoming rate reduction, it remains the market leader in offering the highest interest rate to packaged bank account holders.
However, Virgin Money’s M Club account is unique among packaged accounts on the open market in that it does not include free travel insurance or breakdown cover – benefits commonly found with similar accounts.
For those who prioritise perks like insurance over earning interest on their current account balance, Club Lloyds Silver offers a better alternative, providing travel insurance and other benefits for just £11.50 per month.
How can I make my savings go further?
Over a quarter of adults (28%) keep their earnings in current accounts that pay no interest, according to the Building Societies Association (BSA).
Most major high street banks do not offer any interest on current account deposits.
This means millions of Brits are missing out on free cash because they keep their savings in the wrong account.
There are 24 that do pay interest but they still pay lower rates than easy access savings accounts, according to Moneyfactscompare.co.uk,
For example, Kroo, an online-only challenger bank, offers a 3.65% interest rate on current account deposits up to £500,000.
Starling Bank used to pay interest on current account balances, until the perk was axed back in February.
However, savers could earn more by moving their money to Atom Bank’s easy access savings account, which pays 4.75% interest with a minimum deposit of just £1.
If you keep your cash in non-interest current accounts, you’ll miss out on hundreds of pounds in interest.
What are the best savings rates?
There are four types of savings accounts fixed, notice, easy access, and regular savers.
The rates offered on each of these accounts vary, but we’ve rounded up the best available right now.
If you’re looking for a savings account without withdrawal limitations, then you’ll want to opt for an easy-access saver.
These do what they say on the tin and usually allow for unlimited cash withdrawals.
The best easy-access savings account available is from Atom Bank, which pays 4.75% – and you only need to pay a minimum of £1 to set it up.
This means that if you were to save £1,000 in this account, you would earn £47.50 a year in interest.
If you’re looking to grow your savings and don’t need regular access to your funds, a fixed-term bond or notice account could be a better option.
The best notice accounts offer slightly higher rates than the best fixed-term bonds.
These also come with more flexibility when accessing your cash.
For instance, Oxbury Bank’s 120 day notice account offers savers 4.85% back with a minimum £100 deposit.
The best fixed rate currently offered is QIB’s one-year fixed bond, which pays 4.7%, requiring a minimum investment of £1,000.
If you want to build a habit of saving a set amount of money each month, a regular savings account could pay you dividends.
Principality Building Society’s Six Month Regular Saver offers 8% interest on savings.
It allows customers to save between £1 and £200 a month.
Save in the maximum, and you’ll earn 27.53 in interest.
While regular savings accounts look attractive due to the high interest rates on offer, they are not right for all savers.
You can’t use a regular savings account to earn interest on a lump sum.
The amount you can save into the account each month will be limited, typically to somewhere between £200 and £500.
Therefore, if you have more to save, it would be wise to consider one of the other accounts mentioned above.
FINDING THE BEST SAVINGS RATES
WITH your current savings rates in mind, don’t waste time looking at individual banking sites to compare rates – it’ll take you an eternity.
Research price comparison websites such as MoneyFactsCompare.co.uk and MoneySupermarket.
These will help you save you time and show you the best rates available.
They also let you tailor your searches to an account type that suits you.
As a benchmark, you’ll want to consider any account that currently pays more interest than the current level of inflation – 2%.
It’s always wise to have some money stashed inside an easy-access savings account to ensure you have quick access to cash to deal with any emergencies like a boiler repair, for example.
If you’re saving for a long-term goal, then consider locking some of your savings inside a fixed bond, as these usually come with the highest savings rates.