The online bank that’s bucking the trend by increasing savings rates as millions hit by cuts

AN online-only bank has bucked the trend and increased interest rates on savings accounts as millions are hit with cuts.

Revolut, which has over 10million UK customers, has hiked rates on five accounts, offering up to 5%.

It comes as other savers brace for the interest rates on their accounts to drop after the Bank of England (BoE) lowered its base rate.

The Revolut savings rates have increased to different amounts depending on which plan customers are on.

Revolut offers five plans which charge up to £45 a month and offer different perks including cashback and an in-app chat function.

Those on a free Standard Plan have seen their rate go up from 2.29% AER to 4%.

Plus Plan customers, who pay £3.99 a month, can also get a 4% AER rate, up from 2.39% previously.

Savers on a Premium Plan, which costs £7.99 a month, can now get 4.25% AER, up from 3%.

Metal and Ultra Plan customers have seen savings rates hiked to 4.5% and 5% AER, respectively.

A Metal Plan costs £14.99 a month while the Ultra Plan is £45 a month.

Any interest earned on the savings account is added to your balance daily and there is no minimum deposit required.

Customers can put in a maximum £200,000 into each of the accounts.

Those putting in up to £85,000 will be protected under the Financial Services Compensation Scheme (FSCS).

This means if Revolut Bank goes bust, customers can get any money lost from their accounts back as compensation up to £85,000.

Savers can also add or withdraw money from one of the five savings accounts at any time without being charged.

The increase in rates from Revolut means the Ultra Plan is one of the best easy access savings accounts on the market currently.

According to Moneyfactscompare.co.uk, Chase Bank is also offering 5% AER on its easy access account while Plum is offering 5.06% AER, but on a cash ISA.

Meanwhile, the Santander Edge Saver easy access account is paying 6% AER interest.

However, only on balances up to £4,000 and you need to have signed up to a Santander Edge current account to qualify.

Rachel Springall, finance expert from Moneyfactscompare.co.uk, said Revolut customers considering switching to open up the new savings account rates should factor in the cost of the monthly plans.

She said: “It’s great to see better rates for savers but any subscription model with exclusive savings rates must be considered as a whole to ensure it offers the best possible value for any customer.”

Banks and building societies slashing savings rates

The move from Revolut comes with Nationwide Building Society, Barclays and Chase set to drop interest rates on dozens of savings accounts.

The three are dropping rates from next month after the BoE slashed its base rate from 5% to 4.75% in November.

This is the rate charged to smaller high street banks who then pass this onto members of the public.

If base rate goes down, it tends to see banks slash rates on their savings accounts.

Nationwide is slashing interest rates on 89 savings accounts by up to 0.26% from February 1.

This includes on 55 non-ISA savings accounts and 34 ISA accounts.

Meanwhile, Barclays is dropping rates on two of its savings accounts from February 13 – the Everyday Saver and the Rainy Day Saver.

Rates are being slashed by up to 0.25% on balances up to £10,000.

However, those with an Everyday Saver account with a balance over £10,000 are actually seeing rates rise from 1.16% to 1.26%.

Chase Bank is also dropping the rate on its Chase Saver account.

The savings account’s interest rate tracks the BoE’s base rate, and currently sits 1.25% below it.

However, from February 19, the interest rate will track 1.5% below the base rate instead – a 0.25 percentage point change.

It means savers will see their interest rate go down from 3.5% to 3.25%, as it stands.

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories