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TSB launches new Plus current account paying 5% interest

TSB launches new Plus current account paying 5% interest
Date of Publication: Monday, 31 March 2014 16:00

TSB has launched its new Plus current account, offering 5% interest on credit balances.

 

The bank has thrown down the gauntlet to rivals with its new fee-free current account, Plus, which is the first major account to be launched by TSB since it separated from Lloyds Banking Group last year.

 

Offering 5% interest, the Plus account offers a direct challenge to Nationwide’s FlexDirect account, which offers the same rate of return.

 

TSB's account offers the 5% rate on balances up to £2,000, whereas Nationwide pays on balances up to £2,500.

 

But TSB customers only need to deposit £500 per month into the account to benefit from the 5% rate. Nationwide, by contrast, asks for a minimum of £1,000 per month.

 

TSB Plus account holders will also be able to benefit for longer, as the bank has set no time limit on its 5% offer. Nationwide FlexDirect customers only receive the 5% rate for twelve months before it reverts back to 1%.

 

TSB is also offering customers the opportunity to try the new account before they commit fully to switching to the bank.

 

Most current account incentives now require customers to switch banks using the new seven-day switch service, but TSB says that new customers will not need to switch to take advantage of the 5% offer.

 

Customers will need to deposit £500 per month into the account to qualify for the 5% interest rate, as well as registering for online banking and agreeing to paperless statements.

 

TSB Plus Account

  • No monthly fee.
  • 5% interest on balances up to £2,000. No time limit.
  • Minimum £500 deposit per month for interest benefit - lower than competitors.
  • No obligation to switch banks.

 

TSB Logo 

 

Current Accounts and Incentives

TSB’s new 5% offer reflects the current trend of incentives designed to encourage people to switch accounts.

 

First Direct and Halifax offer a £100 cash bonus to those who switch their current accounts using the new seven-day switch system. The Co-operative Bank offers £100 plus a £25 donation to charity.

 

M&S Bank currently offers a gift card worth £150 to those who take out one of their loyalty-driven packaged accounts, which are currently priced at £10 and £17.50 per month.

 

The retailer will continue to offer a gift card worth £100 if customers switch to its new free current account in the summer using the seven-day service.

 

Current Account Switch Service

 

Is TSB Any Good For Savers?

It’s been clear in recent months that the best returns on the market are available from current accounts rather than traditional savings accounts.

 

Even the best tax-free offerings fall woefully short. The best instant access ISA offers 1.75% from Stafford Railway Building Society, with no inbound transfers accepted.

 

So, the TSB Plus is another useful option in the marketplace, especially for balances of a few thousand pounds.

 

Unusually, consumers will now be able to allow their cash to languish in a transaction account and still earn decent rates of return.

 

And unlike Nationwide FlexDirect customers, they won’t have to begin looking around again in a year’s time.

 

But the limit of a few thousand pounds is a hindrance. For amounts above around £4,000, the Classic Account with Vantange from Lloyds (3% up to £5,000) or Santander 123 Current Account (offering 3% on balances between £3,000 and £20,000) might yet prove a better option.

 

Keith McDonald

Which4U Editor

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Monday, 31 March 2014 16:00
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Top 5 Current Accounts

Provider
AER
Min Bal
O/D Rate
O/D Buffer
Apply
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3.00%
£1
0%
£100
0%
£1
No Offer
No Offer
3%
£500
No Offer
N/A
No Offer
3%
£500
No Offer
N/A
No Offer
0%
£1
0%
for 4 mths
£1,200

Nationwide FlexPlus Account

Nationwide
  • £10 per month gets you the following benefits:
  • Get 3.00% variable on balances up to £2,500 (no interest for balances £2.5k+)
  • 3 month Fee Free overdraft
  • Commission Free Cash Withdrawals Abroad
  • VISA debit card with every account
  • Travel Insurance - Worldwide travel insurance, including winter sports, golf, business and wedding cover for you and your family.
  • Mobile Phone Insurance - Worldwide cover if your phone's lost, stolen, or damaged.
  • Breakdown Cover - UK & European breakdown cover for you in any private car and also anyone driving your car with your permission.
  • Extended Warranty - Get an extra 12 months warranty for eligible household electrical goods.
  • Identity Theft - Get help and support if your personal data's compromised or your cards are lost or stolen.

Nationwide FlexAccount

Nationwide
  • VISA debit card with every account
  • The age restriction to open the account is 18
  • Manage your account online with an excellent internet banking service.
  • Three-month interest-free overdraft when you switch to FlexAccount
  • Free day to day banking
  • Voted Best Overall Online Provider 2009 by Your Money

Santander 123 Current Account

  • The New 123 Current Account pays cashback on household direct debits
  • 1% Cashback on water and council tax
  • 2% Cashback on electricity and gas
  • 3% Cashback on mobile, home phone, broadband and paid for TV packages
  • New 123 Current Account pays also pays in-credit interest
  • 1% AER on the entire balance, once the customer’s balance is £1,000 or over
  • 2% AER on the entire balance, once the customer’s balance is £2,000 or over
  • 3% AER on the entire balance, once the customer’s balance is £3,000 or over (up to £20,000)
  • £5 per month.
  • Your overdraft fee will be 19.9% EAR plus an unauthorised fee of £1 per day.
  • Get a cheque book and a Visa Debit card. You can use your Visa Debit card in shops wherever you see the Visa symbol and at virtually every cash machine in the UK and many worldwide. It also acts as a £100 cheque guarantee card
  • Get 4 Months Fee-Free Arranged Overdraft when you use the Current Account Switch Service to move your current account to us and receive a Defaqto 5 star rated service.
  • Access to your money 24 hours a day 7 days a week through our e-banking service, 750+ branches, 24-hour telephone banking service, LINK cash machine network or even by post
  • You must setup a minimum of 2 active direct debits
  • You must deposit at least £500 per month
  • You are able to Withdraw upto £300 a day
  • This account is open to NEW and EXISTING Santander customers aged 18 and above (must be UK resident)

Santander 123 Current Account

  • The New 123 Current Account pays cashback on household direct debits
  • 1% Cashback on water and council tax
  • 2% Cashback on electricity and gas
  • 3% Cashback on mobile, home phone, broadband and paid for TV packages
  • New 123 Current Account pays also pays in-credit interest
  • 1% AER on the entire balance, once the customer’s balance is £1,000 or over
  • 2% AER on the entire balance, once the customer’s balance is £2,000 or over
  • 3% AER on the entire balance, once the customer’s balance is £3,000 or over (up to £20,000)
  • £5 per month.
  • Your overdraft fee will be 19.9% EAR plus an unauthorised fee of £1 per day.
  • Get a cheque book and a Visa Debit card. You can use your Visa Debit card in shops wherever you see the Visa symbol and at virtually every cash machine in the UK and many worldwide. It also acts as a £100 cheque guarantee card
  • Get 4 Months Fee-Free Arranged Overdraft when you use the Current Account Switch Service to move your current account to us and receive a Defaqto 5 star rated service.
  • Access to your money 24 hours a day 7 days a week through our e-banking service, 750+ branches, 24-hour telephone banking service, LINK cash machine network or even by post
  • You must setup a minimum of 2 active direct debits
  • You must deposit at least £500 per month
  • You are able to Withdraw upto £300 a day
  • This account is open to NEW and EXISTING Santander customers aged 18 and above (must be UK resident)

Santander Everyday Current Account

  • A simple and straightforward current account that helps make managing your money easy and convenient.
  • 0% EAR (variable) overdraft rate.
  • No Daily Arranged Overdraft Fees for the first 4 months when you switch to us (depending on circumstances. See representative example).
  • After 4 months the Daily Arranged Overdraft Fee will be 50p per day capped at 20 days each monthly statement period (if you don't switch these Daily Arranged Overdraft Fees will start from when your account is opened.)
  • Access to our dedicated Switcher Service - It is important that you feel confident about switching to us and what is involved. Click here for full details of our simple three-step process.
  • Easy access to your account 24 hours a day with our internet and phone banking service. Plus you have access to over 1,300 Santander branches.
  • Get 4 Months Fee-Free Arranged Overdraft when you use the Current Account Switch Service to move your current account to us and receive a Defaqto 5 star rated service.
  • Withdraw upto £300 a day.
  • No interest is paid on your balance.
  • You must be aged over 18 and live permanently in the UK.

Santander 123 Mini Current Account

  • The 1|2|3 Mini Current Account is designed to provide a safe environment to learn money management and take the first steps towards financial responsibility for those aged between 11 and 18.
  • With the 1|2|3 Mini Current Account you'll get:
  • Rewarding interest rates paying 3% AER/2.96% gross (variable) on balances from £300 up to a maximum of £2,000.
  • £100+ = 1% AER
  • £200+ = 2% AER
  • £300 - £2000 = 3% AER
  • 24/7 access to your account via Online, Mobile and Telephone Banking.
  • Access nationwide via our branch network.
  • Free text and email alerts about your account.
  • The choice of a cash card or a Visa debit card.

Santander 123 Mini Current Account

  • The 1|2|3 Mini Current Account is designed to provide a safe environment to learn money management and take the first steps towards financial responsibility for those aged between 11 and 18.
  • With the 1|2|3 Mini Current Account you'll get:
  • Rewarding interest rates paying 3% AER/2.96% gross (variable) on balances from £300 up to a maximum of £2,000.
  • £100+ = 1% AER
  • £200+ = 2% AER
  • £300 - £2000 = 3% AER
  • 24/7 access to your account via Online, Mobile and Telephone Banking.
  • Access nationwide via our branch network.
  • Free text and email alerts about your account.
  • The choice of a cash card or a Visa debit card.