Savings alert: Bank increases current account interest rate to 3.33 percent | Personal Finance | Finance
Kroo Bank has confirmed it will be increasing the interest rate of its current account from 3.03 percent to 3.33 percent. This could be good news for savers who want to easily access their money while still earning interest on it.
Launched in December 2022, Kroo originally provided a two percent interest rate on up to £85,000 held in the account.
Due to being beaten elsewhere, the bank decided to increase the current account’s rate to 3.03 percent.
This made it the highest easy-access interest rate on the market but today’s hikes make it even more appealing to customers.
Any money deposited into this account is protected by the Financial Services Compensation Scheme (FSCS).
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For those interested in taking advantage of this interest rate, savers can begin the application process by downloading the free Kroo app.
Upon doing this, new customers can follow the bank’s sign-up instructions for the current account deal.
As it stands, there is no monthly fee attached to Kroo’s current account and it requires no hard credit check to open.
Andrea de Gottardo, the CEO of Kroo, outlined why he thinks people should take advantage of the financial institution’s savings deal.
He explained: “We truly believe in changing the banking industry for the better by providing customers with a fair deal and a straightforward, no strings attached experience they deserve from their bank.
“That’s why we’ve decided to further increase our current account interest rate in line with the Bank of England.
“We provide customers with an account to keep all their money in one place and take advantage of the levels of high interest usually associated with a savings account. Now more than ever, who you bank with really does matter.”
This latest intervention from the bank comes after multiple interest rate hikes from the Bank of England.
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The central bank has opted to raise the base rate 10 consecutive times over the last year in a bid to control the UK’s inflation rate.
Currently, the base rate has been increased to four percent but the latest Consumer Price Index (CPI) inflation rate for January is sitting at 10.1 percent.
There had been widespread concern that inflation is continuing to diminish returns on savings and banks have been unable to keep up.
According to Kroo’s CEO, this is why financial institutions should align their rates with the Bank of England’s decision.
Mr de Gottardo added: “Interest rates should be passed on to savers, and the importance of this has become increasingly clear with the regular increases to the Bank of England base interest rate. Now more than ever, people want money in their pockets, not in bank profits.
“Customers are missing out on any benefits of rising interest rates by leaving their money in non-interest-bearing accounts and enabling banks to profit from their cash.
“We recently analysed Bank of England data and found banks are profiting up to £9.4billion in interest that’s not being passed on to customers.
“With the latest rise to four percent, this figure is likely to have risen even higher.”