New TSB account: how to make £600 a year

Pound notes

TSB has hit the headlines with the launch of its new Plus current account promising 5% interest on balances of £2,000, worth £100 a year, but a Moneywise investigation has found how couples can get six times that.

There's nothing in TSB's terms and conditions to stop customers taking out two individual accounts - which could earn them up to £200 a year - but couples are also both able to open a joint account, providing they transfer £500 in to all of the accounts each month.

That means couples can open six accounts between them, potentially earning themselves up to £600 in interest over the course of a year if they deposit £2,000 in each of the six accounts.

That's a much better rate of interest than anything else currently available on the market – although the Plus account won't actually arrive until the end of the month.

For example, the next best rate is the 3% the Santander 123 current account pays on balances of between £3,000 and £20,000, but customers must pay £2 a month for the account.

Additionally, while customers have to commit to paying in £500 a month to each Plus account they open – which, in the case of a couple with six accounts between them, would amount to £3,000 a month – the money does not have to be a direct credit and can be paid in over the counter.

Moreover, as long as each account has a balance of £2,000, there's nothing to stop customers withdrawing the £500 monthly deposit immediately after paying it in. This means a couple wouldn't necessarily have to tie up £3,000 a month – or £36,000 a year – to earn the £600 in interest.

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Make the effort

Personal finance expert Andrew Hagger of, said: "If you're prepared to put in a bit of effort up front to open the maximum number of permitted accounts, then the TSB Plus account gives you the ability to obtain a savings return far in excess of any instant access savings account and even more than you'd get for locking your cash away for seven years in the First Save fixed-rate bond that pays 3.5%."

A TSB spokesperson confirmed to Moneywise that there is nothing to stop a customer opening two individual Plus accounts, plus a joint account – or to prevent a couple opening up to six accounts between them.

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just a quick question re th tsb plus account  you said if you opened 6 accounts as a couple and put £2K in each one youcan earn £600 at the 5% interest rate - why not just open one account anput the whe £12K in it and you'll still ge the £600 interest at 5%
save a lot of paper, time and admin??? 

Charlie, from what I am reading, I think this TSB account will only pay 5% on the first £2000, so if you have say £5000 in the account, the 5% will only be paid on the £2000, thus the need for multiple accounts of £2000.
I have £18000 in Santander's 123 account and I currently get £40 per month interest @3% per annum, I pay a fee of £2 per month which is nothing when you think some banks have a monthly fee of £15.
The only downside is that this £40 attracts basic income tax, so I am actually left with £32 per month.
The question I would like to ask, does the TSB 5% rate also attract basic income tax, which would effectively means the rate is actually 4%?
P.S. I am a 68 year old pensioner and am willing to stand corrected if I am wrong
Harry Charlton

Sorry, but it's me again, I have looked on the TSB website and can find no information about this plus current account.
When does this new account start?
I shall have to try going into my local branch to see if I can find a brochure on the subject.

Hi Harry, The interest you receive depends on if you pay tax or not. I don't, (also a pensioner) so I opened  Santanders 123 account in my name and registered with the bank as not being liable to pay tax. Therefore I get the full 3% which works out at £50 on the full £20,000. I also make sure to keep it topped up to the max as soon as the two obligatory direct debits go out. Likewise with T.S.B.- register with them if you are not liable to pay tax & the full 5% will be yours. Hope this clarifies. Yours, a devotee of Martin Lewis :)

Hi all, just rang the T.S.B. up..helpful lady told me the plus account opens on the 30th March. It doesn't matter if you are working, self employed or a pensioner, as long as you pay in £500 a month. Easy peasy - transfer in, transfer out...just keep in the £2000 (yes, it's a M Lewis tip)