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Santander set to review interest rate on its 123 current account

Written by: Paloma Kubiak
Santander has confirmed it will be reviewing its current accounts in light of today’s decision by the Bank of England to cut the interest rate to 0.25%.

The banking giant said given the changing market conditions, including the market expectation that interest rates will be lower for longer, “we’ll be reviewing our current accounts”.

It added that any customers affected will be notified of changes in advance “so they can take appropriate action if needed”.

The confirmation comes a week after speculation mounted that Santander was considering cutting the interest rate on its 123 Current Account from 3% to 2%.

At the time, a spokesperson, said: “We do not comment on speculation,” and today it told “Our current account rates are under review after today’s Bank of England decision to cut Base Rate.  If we were to make a change to any of our banking products, including the 1I2I3 Current Account, we would write to customers providing them with 60 days’ notice.”

Santander also confirmed the following in light of the Bank of England’s decision to reduce the Base Rate:

  • Personal savings accounts: rates will not be reduced by more than 0.25%
  • Variable savings rates: Santander will review these and “notify any customers whose accounts will be impacted ahead of any changes being made, so customers can take appropriate action if needed”.
  • Mortgages: all mortgage products linked to the Base Rate will move in line with the reduction.

Reza Attar-Zadeh, head of retail products, said: “When we review rates, following a change in Bank of England base rate, we consider both the interest we charge for borrowing money, and the rate of interest we can offer on deposits. Santander is passing on the rate reduction in full to its mortgage customers and for our existing savings accounts, we’ll be reducing rates by no more than 0.25%. Given changing market conditions, including the market expectation that interest rates will be lower for longer, we are also reviewing our current account interest rates.”

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