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Current account users will lose interest and face fees if they don’t meet monthly funding rules

Paloma Kubiak
Written By:
Paloma Kubiak

People could be hit with unexpected fees or miss out on interest if they fail to pay a minimum amount into their current account each month as a result of coronavirus job losses or wage reductions.

Several major banks and building societies offer attractive rates of interest – as much as 5% – on their current account products.

However, customers are required to meet strict criteria to receive the interest, including depositing a minimum amount each month. If they don’t meet these criteria, they are not eligible for the interest and could even face a penalty as well as ongoing account charges.

For example, Santander 1|2|3 customers need to pay in a minimum of £500 per month where they can earn 1.5% on up to £20,000. However, if they fail to meet the minimum £500 funding requirement, they will lose the interest for that month and will still be required to pay the £5 a month current account fee.

Lloyds Banking Group requires Club Lloyds Current Account customers to pay in at least £1,500 a month or they’ll pay a £3 a month fee.

Other big-name brands including Nationwide, Bank of Scotland and TSB also have similarly strict guidelines and none have said they will waive minimum pay-in amounts during the current coronavirus crisis.

Here’s what they told us:

Bank of Scotland

The Classic Vantage Current Account pays a tiered rate of interest: 1% on up to £3,999.99 and 2% on balances between £4,000-£5,000. It requires a minimum £1,000 to be paid in monthly, two direct debits must be set up and customers must remain in credit.

The T&Cs state: “If you meet the Vantage conditions, you will qualify for credit interest for that monthly billing period, which runs from the second working day of a month to the first working day of the next month. If you do not meet all the Vantage conditions, we will not pay interest on the amount in your account.”

Customers unable to pay in the £1,000 a month will forego interest for that month only.

Lloyds Banking Group

The Club Lloyds Current Account is slightly different to its competitors as it pays a tiered rate of interest so long as customers set up two direct debits: 1% on up to £3,999.99 and 2% on balances between £4,000-£5,000. Therefore, the interest rate is linked to the direct debit aspect of the account.

However, it requires a minimum £1,500 to be paid in monthly otherwise customers pay a £3 a month fee. There are currently no plans to waive this £3 a month fee if customers can’t pay in the minimum £1,500 a month.

But as there is no fixed or minimum term for the Club Lloyds account to be open, customers can move to another account to avoid the £3 a month fee. This would mean losing the lifestyle benefits associated with the account though, such as cinema tickets and annual magazine subscriptions.

Nationwide Building Society

The FlexDirect Current Account pays 5% on balances up to £2,500 (2% on £1,500 from 1 May for the first 12 months, 0.25% after).

It requires customers to pay in a minimum of £1,000 a month (excluding transfers from other Nationwide accounts or Visa credits/refunds).

Nationwide confirmed that where a customer doesn’t pay in the £1,000 per month funding requirement then no interest is paid for that month (this is its standard policy). It added there are no current plans to change the funding requirement to earn the interest.

A spokesperson, said: “We have a range of measures to support members who have been impacted by coronavirus, such as overdraft payment holidays. Where possible we are asking people to apply online to keep our telephone lines free for vulnerable and older members who need to call.”


The 1|2|3 Current Account pays 1.5% on up to £20,000 (1% from 5 May) and requires customers to pay in a minimum £500 per month from a non-Santander account and set up two active direct debits.

It also allows customers to earn up to 3% cashback on selected household bills (capped at £15 per month from 5 May) but there’s a £5 a month fee for the account.

If customers are unable to meet the £500 a month funding requirement, then they won’t receive the interest or cashback for that month but will still be charged the £5 a month account fee.

However, for customers who know they will be unable to fund the account with £500 a month, they can temporarily transfer to another more suitable current account with Santander via the online banking app or website.


The Classic Plus Current Account pays 3% on up to £1,500 (1.5% from 2 May). It requires a minimum £500 monthly deposit, customers must register for internet banking and log in regularly, plus set up paperless statements and correspondence to earn the interest (paid monthly).

If a customer doesn’t meet the £500 deposit requirement for a month or two, they won’t be eligible for interest in that month/s. TSB said it won’t change their ongoing eligibility to earn credit interest in subsequent months, adding that in the meantime, it is “monitoring this situation closely”.

A spokesperson, said: “Our focus as a bank has of course been on making sure that customers impacted by the situation are supported and able to access money, as well as being able to continue servicing their existing borrowing.”