Starling Bank has launched a market-leading easy-access savings account paying 5% interest. The account is available for new customers and allows unlimited withdrawals without incurring a penalty.
Starling's Easy Saver pays new customers 5% on balances of up to £25,000. The account has a fixed bonus of 2.5% for six months, on top of an underlying standard variable rate of 2.5%. While customers can save up to £1 million in the account, the top rate is only payable on balances up to £25,000. The rate drops to 2.5% on any balances above this threshold.
Customers need to open a Starling current account to apply for the easy-access saver. Unlimited penalty-free withdrawals are permitted, and interest is accrued daily and paid monthly. Starling is a digital bank, which means the account may not be right for those who prefer to do their banking at a branch.
The 5% offer is only for new customers. Loyal customers are offered a lower 4% rate, including a 1.5% fixed rate bonus for six months.
Starling's 5% saver pays the most on the market as of 1 October, making it the top easy-access savings account in terms of interest rate. However, there are caveats. Jessica Sheldon, MoneyWeek's deputy digital editor, said: "Starling's 5% easy access savings account looks attractive but it includes a 2.5% bonus rate for six months, so you might want to check if you can get a more competitive rate elsewhere in half a year's time. Plus, the underlying rate is variable, meaning it could change at any time."
Customers can close their Starling Easy Saver without incurring a penalty, so once the bonus period comes to an end, they might want to review their options. The next best account is Zopa's Limited Access pot, which pays 4.56% and has a fixed rate of 1.05% for 12 months, followed by Cynergy Bank's 4.55% saver, which includes a 2% fixed bonus for 12 months. Alternatively, those wishing to fix their savings could earn up to 5.12% with AlRayan Bank if they lock away their cash for a year.