You are here: Home - Saving-Banking - News -

TSB to axe interest on Classic Plus current account

0
Written by:
23/09/2020
Customers with a Classic Plus current account will no longer earn any interest on their money from December.

The TSB Classic Plus current account is only available to existing customers after it was closed to new applicants this morning.

It currently offers 1.5% AER but from 2 December 2020, it will axe credit interest altogether.

The move comes just months after TSB halved the interest rate on the account from 3% as of 2 May 2020, meaning customers could earn a maximum of £22.38 a year on a balance of £1,500.

And it’s a big fall from the previous 5% AER offering as a gesture of goodwill to customers in the wake of the bank’s major IT meltdown of 2018.

TSB couldn’t share how many customers will be affected, but added that across its product portfolio, it has 5.2 million customers.

Do you still need to pay in £500 a month?

In order for customers to be eligible for in-credit interest, they were required to meet certain criteria, including:

  • Paying in £500 a month
  • Registering for internet banking, paperless statements and correspondence
  • Logging in regularly

However, as the interest will be completely removed, TSB confirmed that in order for customers to be eligible for the interest until then, they will need to meet the original conditions for the account.

It added that existing Classic Plus customers will be able to use their account as normal beyond December if they wish.

In an email to customers, TSB wrote: “With the recent reduction in interest rates and the current economic climate, we hope you understand the reasons why it has been necessary to take this decision.”

A TSB spokesperson said: “We regularly review our products to ensure they are fit for purpose and are in line with market conditions.  Given the continued low interest rate environment, we have made the decision to reduce the interest on our Classic Plus account.

“We have recently launched our new Spend and Save current account, which addresses the needs of our customers – to help with their everyday banking needs and provide them with simple tools to help manage their money.”

The decision follows a similar move by Tesco Bank. In July, it announced that the 1% rate offered on current account savings up to £3,000 would be scrapped from 22 September, affecting 240,000 customers.

TSB’s Spend and Save current account

Earlier this month, TSB launched its Spend and Save current account featuring savings pots, automatic spending round-ups, and text alerts to help customers with their day-to-day finances.

Customers could also earn £5 cashback for the first six months by making 30 payments or more on their debit card each calendar month.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Everything you wanted to know about ISAs…but were afraid to ask

The new tax year is less than a fortnight away and for ISA savers or investors, it’s hugely important. If yo...

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week