Starling Bank’s 4% easy access savings account launched in December and is a good option for its customers looking for the best savings deals. The account pays interest each month, and has a competitive return on cash. The digital bank is also noted for being one of the best for online banking.
The launch of Starling’s easy access savings account came ahead of its decision to remove the 3.25% interest rate it pays on current accounts from 10 February 2025.
So, it came as no surprise that customers decided to jump onto the opportunity to earn 4%. But for some users, the request to open the account was met with an automated message saying the account was not available to them, with no explanation from Starling.
Sign up to Money Morning
Don’t miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don’t miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
When a reader contacted MoneyWeek to look into why she – someone who appeared to be a perfect customer with significant funds in her Starling account, no overdraft and credit score of 999 – was rejected for the attractive deal, we decided to take a look at the issue.
Social media forums are full of disgruntled customers expressing their concerns and sharing how they have been treated. So, what has gone wrong with Starling’s 4% easy access savings offer?
Starling declining savings applications
One reader, who only wanted to be identified by her first name Zoe, told MoneyWeek: “Starling sent an email out last year saying it was withdrawing interest it pays on current accounts from 10 February 2025. So, when the savings account became available, I decided to shift my money. But, after applying, I got an immediate rejection, but they did not say why.”
A screen shot, shared with MoneyWeek, showed the customer was simply told: “Sorry, we can’t open an Easy Access Saver for you.”
Zoe said: “It was a standard message with no reason given. I could not understand it as I had a significant sum of money in my account, I have an excellent credit score and don’t use overdrafts. I was really happy with Starling before this.
“After I was rejected, I got worried and checked with Experian to make sure there was no fraud with my accounts or name. It was all clear.
“I complained to Starling and they simply told me I was not eligible, but they then did not tell me what that eligibility is. It makes no sense.”
Zoe has now taken most of her money out of Starling as a result, earning interest elsewhere. Her husband and son were also rejected for the Easy Saver with no reason. An updated message from Starling to her son said the application may have been rejected due to ‘constraints’.
In a statement to MoneyWeek, Starling Bank said: “Although we have approved tens of thousands of Easy Saver applications since soft launching in November, we have had to decline some too in line with certain eligibility criteria. We’re sorry about any inconvenience this causes and we’re working hard to open as many accounts as we can.”
While we asked what the eligibility is, Starling said it was unable to go into eligibility criteria, “but we’re currently subject to certain constraints around opening new accounts, which means we have to decline some applications. The decision to decline an Easy Saver application may well be a result of the constraints, not an individual’s circumstances.”
Zoe said: “They are taking away the interest from the current account, and then do not want to give users access to a savings account. While they can do what they want, they are not treating customers fairly and I am going to take my issue to the ombudsman.”
While some are rejected, other customers have managed to open the linked savings account successfully in seconds.
There have been mixed comments on social platform, Reddit.
Easy Saver – has anyone successfully applied? from r/starlingbankuk
Is Starling being fair?
Banks have come under pressure from the Financial Conduct Authority to give customers better deals on savings. Last year when interest rates were above 5%, the regulator accused banks of short-changing customers with poor interest rates.
While the Bank of England has made some cuts to the base rate, there are still a number of accounts offering a decent return on easy access or fixed rate accounts, and beat inflation – which was 2.5% in December.
So, Starling’s 4% deal is an attractive proposition, but its eligibility criteria remains unclear.
Starling Bank’s growth
Starling has built a reputation on digital delivery, which means most things, including opening additional accounts within the app, are done with speed and ease.
It is one of the reasons why Starling has enjoyed a stupendous growth.
But, is its rate of growth working against it? Last year, Starling was fined £29 million for financial crime failings. The Financial Conduct Authority said the bank repeatedly breached a requirement not to open accounts for high risk customers.
Starling grew from 43,000 customers in 2017 to 3.6 million in 2023. But, while its customer base was growing, measures to control financial crime were not.
In a statement, David Sproul, chairman of Starling Bank, said at the time: “I would like to apologise for the failings outlined by the FCA and to provide reassurance that we have invested heavily to put things right, including strengthening our board governance and capabilities. We want to assure our customers and employees that these are historic issues.
“We have learned the lessons of this investigation and are confident that these changes and the strength of our franchise put us in a strong position to continue executing our strategy of safe, sustainable growth, supported by a robust risk management and control framework.”
Leave a Reply