Halifax is following major high street banks like Lloyds and TSB to slash interest on bank accounts.
Taxpayer backed Lloyds Bank is halving the rate on its Club Lloyds Account from four per cent to two per cent on balances of up to £5,000 from January 2017.
At the same time, Halifax is chopping the monthly reward payment on the Reward Current Account from £5 to £3.
And in another blow, TSB is reducing the in-credit rate on its Classic Plus account from a generous five per cent to three per cent on balances of up to £2,000 from January 4 2017.
The bank is also reducing the rate on its Enhance Current Account from 0.75 per cent to 0.25 per cent on balances of up to £5,000 from the same date.
As part of Club Lloyds Account changes, customers who pay in less than £1,500 a month will see the charge fall from £5 to £3 a month - the account remains free for anyone else.
Customers will be informed of the changes in writing in the coming weeks.
This follows similar moves from Santander, which is axing its three, two and one per cent in-credit tiered interest rates and replacing it with a flat 1.5 per cent on balances up to £20,000 from November.
High interest current accounts have attracted savers in recent years, amid measly returns on traditional savings.
But now cautious savers are once again bearing the brunt of monetary policymakers, after the Bank of England cut interest rates from 0.5 to 0.25 per cent in August.
Since then hundreds of savings accounts have had rates slashed even lower, and now bank accounts are also reducing returns.
The changes leave people with few options to earn a risk-free return on cash.
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