The Interest rate on our current account is changing.
Tesco Bank made a two year commitment in April 2017 to guarantee the credit interest on our current account, providing certainty to customers for a period of time as interest rates were reducing in the market.
As the end of that commitment approaches we have written to customers advising them of the new interest rate of 1% AER that will apply to your account from 14 June 2019.
The way that Tesco Clubcard points are collected remains the same. Customers will still get 2 Clubcard points for every £1 spent at Tesco with your debit card – which is twice as many as you’d get with your normal Clubcard.
There is no action for you to take now and we have provided further information below should you have any questions.
Where can I get the best savings rate with Tesco Bank?
We have a range of Tesco Bank savings accounts, you can find our current rates by visiting the savings section of our website.
How do I make money transfers?
If you’re registered for our Online Banking or Mobile App, you can transfer up to £10,000 per day out of your account.
If you’re not registered for Online Banking, you can do so here. If you’re not registered on the Mobile App, you can do so by downloading the Tesco Bank Mobile App by visiting the App Store on your mobile phone.
Alternatively, you can send money to another account by calling 0345 835 3353 (or minicom 0345 366 6471*). Calls may be recorded. *This number may be included as part of any inclusive call minutes provided by your phone operator.
Lines are open 24 hours a day, seven days a week.
How can I close my account?
Call us on 0345 835 3353 (or minicom 0345 366 6471*) to close your account. If you need to close your joint account, either party can do this. Calls may be recorded. *This number may be included as part of any inclusive call minutes provided by your phone operator.
Lines are open 24 hours a day, seven days a week.
1 Tesco Clubcard point for every £1 spent in Tesco plus your normal Clubcard points and 1 Clubcard point for every £8 spent outside Tesco in each debit card purchase transaction. Clubcard points collection rates are subject to change. Exclusions apply and there are some products at Tesco you can’t collect points on, see the Tesco Clubcard website for details. The Tesco Clubcard Scheme is administered by Tesco Stores Limited, Tesco House, Shire Park, Kestrel Way, Welwyn Garden City, AL7 1GA, who are responsible for fulfilling points.
Got a letter in the post about this today. I'm out.
I was an early adopter of Tesco Bank, first for credit cards and then for Current Account at launch. I was the "poster child" for account switching and my family were published in the Daily Mail as a success story for the bank. https://www.thisismoney.co.uk/money/saving/article-2754579/Feeling-itch-switch-bank-Switching-tool-p...
Since then, it's all gone downhill.
First you killed the great clubcard deals I got on my credit card. I switched to AMEX, they pay me 1% cashback on all transactions, 2% on travel (like train tickets and holiday flights) and 3% on eating out.
Then you reduced the clubcard deal on the current account, there are old threads here that explain how happy I wasn't with this.
You failed completely to deliver any integration with Google Pay which saw me open a peripheral account with Starling Bank just to be able to use that function. This is where things went steeply downhill.
Starling showed me how a banking app should work. How easy it could be to manage my day to day transactions and separate pots of money to keep track of my budgets. They were also massively cheaper for foreign currency and charged no fees for overseas cash withdrawals. I slowly started doing more banking with Starling and shifting some of my savings over as their "spaces" function makes it easier to track my virtual pots of money.
The Tesco Clubcard deals also got poorer value - not only was it harder to earn points, they were worth less when converted to vouchers.
And now, four years on from switching to Tesco, you dump the interest rate to a third of its previous value. Many banks do better than this and on the full balance not just the first £3000.
So it's now time to push the account switching button in Starling. To be fair, their interest rate is a little lower than yours but we're only talking £15 a year difference on £3000 - it's worth that just to not have to use your app any more. Additionally, they will also pay interest on the full balance so if I have £6000 with them (I usually have way more than that) then I'll earn the same interest or more each year anyway.
I enjoyed my time with Tesco Bank and the pleasant Scottish staff on the phone. I've recommend you to numerous family & friends, but no more. The package is no longer competitive or appealing - the challenger bank appears to have given up.
p.s. you closed my local branch too. I can no longer bank in my local Tesco store.
If you don't have branches, I might as well use a true online bank.
Hi @jaffacake, I'm sorry to hear you're unhappy with the changes. We did make all of our customers aware when they took out the account that the interest rate was only guaranteed until the 1st of April 2019. We are an online bank which is why we've removed in-store banking from a lot of our stores. I'm sorry these changes mean we're not suitable for you, hopefully we'll be able to offer you something more favourable in future.
I think I must be missing something regarding the interest rate change. Back in April 2017, when the guarantee was made, BoE base rate was 0.25%. Now, two years later, it's three times higher, at 0.75%. Yet Tesco are now cutting their rate by two thirds. Not sure which economic principle that follows?
If you would like to discuss this further, please call our Current Accounts team on 0345 835 3353 (24/7) and a member of our team will be able to discuss this further.
Me & the wife have 3 current accounts between us, we were early adopters when there were no real conditions attached to the current account to get the 3% interest on up to £3000. The 3% with no minimum monthly pay-in or direct debits (Dd) was a real enticement when interest rates elsewhere were so low, and to have this protected till at least April and now 14 June this year isn't bad.
For newcomers since it has become a £750 monthly pay-in and 3 Dd's to get the 3%, and I see on Tesco Banking that this is the requirement for the now 1% rate.
Anyone who thought Tesco would continue to pay 3% interest on a current account was probably naive, the warning was effectively given when the initial statement of protection till April 2019 was made.
Much as I would like to stay for ease and convenience unless Tesco makes a change looks like we'll just have to look elsewhere.
Its a shame that the savings accounts don't have great interest rates either, though the Internet saver which has easy access at 1.42% (including first year bonus of 0.87% isn't far off being competitive with the better paying easy access accounts available elsewhere online. It's just a pain having to close and open accounts after a year, time for one of the banks to think about automatically moving you to the latest such account at the end of the bonus term just to reward loyalty. You'd still have to review to check competitiveness but at least they'd be in with a chance of retaining your custom and loyalty.