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Club Lloyds and Bank of Scotland Current Account interest rates slashed

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22/07/2020
Club Lloyds and Bank of Scotland Vantage customers will earn a lower rate of interest on their current account cash from October, the banking group has confirmed.

The Club Lloyds and Bank of Scotland Vantage Current Account pay a tiered rate of interest with customers currently earning 1% on up to £3,999.99 and 2% on balances between £4,000-£5,000, as long as they set up two direct debits.

From October, the variable rate of interest customers can earn on credit balances will be cut.

For balances up to £3,999.99, customers will earn 0.60% AER and a reduced rate of 1.5% AER for balances between £4,000 and £5,000.

As before, no interest is paid on amounts above £5,000. Club Lloyds requires a minimum £1,500 to be paid in monthly otherwise customers pay a £3 a month fee. However, this fee has been waived in June, July and will also be waived in August. It will apply again as normal in September 2020, based on what was paid into an account in August 2020.

For Bank of Scotland customers with Vantage, they need to pay in a minimum £1,000 each month and keep the account in credit.

Letters are being sent out to customers this week alerting them to the changes. A Lloyds Bank spokesperson said: “Our Club Lloyds account continues to recognise loyalty through its range of benefits; including the recent introduction of free movie downloads throughout the year and exclusive access to cashback offers on mortgages and enhanced savings rates.

“In line with the market, we have made some changes to the rates of credit interest and whilst we understand customers may be disappointed, we are confident the account still offers exceptional value for money.

“We have also made changes to the rate of credit interest earned through Bank of Scotland Vantage, which continues to give our customers credit interest as a free add-on.”

Santander today announced changes to its current accounts – doubling the fee on its 123 Lite account and tweaking the cashback rates on categories.

And Tesco Bank recently confirmed it would scrap the in-credit interest offered on its current account in September.

Where now for current account perks?

While interest rates are being slashed across the board, there are still some options for savers when it comes to current account perks.

Independent rate monitoring site, Savings Champion lists Virgin Money, Nationwide Building Society and TSB in its best buy table for interest-paying current accounts.

Virgin Money’s Current Account offers 2.02% AER on balances up to £1,000. Interest is paid monthly and it can be opened in branch, online and by phone.

Nationwide Building Society’s FlexDirect Current Accounts pays 2% AER on up to £1,500. The interest rate reverts to 0.25% after the first 12 months and also falls to 0.25% if a minimum of £1,000 isn’t deposited each month during the first year. New customers can apply online but will be required to bring ID into branch to complete the application process.

The TSB Classic Plus account pays 1.5% AER on balances up to £1,500. A minimum of £500 must be paid into the account each month and you must register for internet banking, paperless statements and correspondence to qualify. It can be opened in branch, online and by phone.

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