How does interest on my bank balance work?

The interest on your balance is calculated daily and paid directly into your account once a month – starting from the day you open your account. If you have a pending outbound payment that hasn’t been processed by the end of the day, you’ll earn interest on that amount until it’s cleared.

Can the interest rate paid on my bank balance change?

Unless we've told you otherwise, the interest rate you’ll earn on your bank account balance is variable, which means it can go up or down.

If we plan to reduce your rate, we’ll give you at least 2 months’ notice before doing so. If we’re increasing your rate, we’ll apply the change straight away and drop you a confirmation email afterwards.

Do I have to pay tax on my interest?

Depending on your individual circumstances, you may need to declare your earnings to HRMC if they exceed your annual Personal Savings Allowance (PSA). Introduced in 2016/17, the PSA gives all tax-payers a tax-free savings allowance. If you're a basic rate tax-payer, you can earn up to £1,000 per year tax-free. Higher earners can earn up to £500 per year.  

You may need to consider paying tax on earnings for the tax year during which the interest was applied to your account.