Changes to your bank account

Find out what a bank has to do when it is going to reduce the interest rate it pays on your account.

Your bank can only change the interest rate it pays when your account is in credit if your terms and conditions have a fair clause that allows them to do so.

If your bank plans to reduce your interest rate it should tell you in advance.

The type of notification your bank must give you depends on a number of things, including the type of account you have.

Your bank does not have to notify you if the interest rate on your account is linked to an official rate – such as the Bank of England bank rate – and it automatically moves when that rate does. This is sometimes known as a ‘tracker rate’. Otherwise, you can usually always expect your bank to give you reasonable notice. 

You may have the type of account from which you can make payments. If so, if your bank wants to reduce the rate of interest it pays when your account is in credit then it has to tell you two months before the change.

For accounts that you cannot make payments from, your bank has to give you reasonable notice. If your bank gives you this notice more than two weeks before the change we expect them to send you a reminder. Your bank must also give you notice if an introductory, promotional, or preferential rate of interest that applies to your account is due to expire.

Raising the interest rate

These rules give you enough time to move your money to another account if you are not happy with a reduction in the interest rate on your accounts. 

If your bank wants to increase the interest rate it pays on your account, it can make the change immediately and does not have to tell you.

If the interest rate on your account is reduced without warning you can complain to your bank. Find out more about how to complain.