Metro Bank has confirmed to bank customers plans to cut savings interest rates to under four per cent in a blow to savers.
The challenger bank has notified its customers that interest rates linked to its Current Limited Edition range will drop in a couple of months' time, MoneyWeek reports.
This comes amid a wave of savings rate cuts from high street banks and building societies in recent months after a period of high-interest accounts.
Among the major banks withdraw competitive deals from the market include Santander and Yorkshire Building Society.
Savers have benefited from the Bank of England's decision to raise the country's base rate in the financial institution's fight against inflation.
Since August 2023, the Bank has held rates at 5.25 but analysts are pricing in a rate cut in the later half of the year which banks appear to be preparing for.
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Metro Bank is cutting interest rates later this year
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Challenger banks, including Metro Bank, have been considered the best places to find high interest accounts which makes this coming rate cut even more devastating to bank customers.
From July 8, the bank will reduce the interest rate on its variable Current Limited Edition savings accounts to 3.95 per cent AER.
This range of accounts are reserved to existing customers of Metro Bank and not available to new ones.
However, the interest rate is still live for those who took advantage of the account before it left he market and met the eligibility criteria at time of opening it.
Those customers affected include those anyone opened a Current Limited Edition Instant Access Account or Instant Cash ISA between November 10, 2023 and 12 February 2024.
Customers will also be earning one of the following rates: 5.22 per cent AER, 4.97 per cent AER, 4.51 per cent AER or 4.01 per cent AER..
Any savers affected by this coming interest rate cut would have been informed this week, two months in advance of the change.
Furthermore, Metro Bank has informed customers that it is removing the “end date” on all Current Limited Accounts at which point the interest rate is changed.
Usually, the bank ends limited edition interest rates after a year but Metro will now tell customers if it decides to end or change the deal they are on.
Despite this rate cut, Metro Bank customers still have two months to take advantage of its competitive offerings.
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The Bank of England has held the base rate at 5.25 per cent in recent months GB NEWSRachel Springall, a finance expert at Moneyfacts, said: "Challenger banks and building societies continue to offer the top easy access rates, so savers would be wise to review their account and switch if their loyalty is not being rewarded.
"One area of the market to thrive over recent months has been Cash ISAs; easy access returns have fallen recently, but unlike accounts outside of an ISA wrapper, they are higher than they were six months ago.
"A positive ISA season has been the key to improving accounts for savers this year, ideal for those looking to protect their cash from tax.
A Metro Bank spokesperson said: "Our Limited Edition rates are variable throughout the term and we review these regularly in line with changes in the savings market.”