Neobanks battle to lure UK savers with juicy yields as interest rates rocket to a 14-year high
The Starling Bank app displayed on a person's phone. Adrian Dennis | AFP via Getty Images LONDON — Online banks in the U.K. are racing to bump up the yields on their savings accounts in a bid to lure cash-strapped savers after the Bank of England increased its benchmark interest rate for a ninth time in a year. After the new rate rise was announced Thursday, Starling Bank and Chase U.K., the U.K. challenger brand from American banking giant JPMorgan , took steps to capitalize on the move. Chase U.K. said it would increase the variable AER, or annual equivalent rate, on its saver account to 2.7% from 2.1% effective Jan. 4, 2023. On Thursday, Starling rolled out its first savings product, a fixed-term deposit account offering a guaranteed return of 3.25% after one year on balances of between £2,000 ($2,439) to £1 million. "We've re-entered the era where banks use better savings rates to acquire customers," Simon Taylor, head of strategy at fintech startup Sardine.ai...