New TSB account: how to make £600 a year

Published by Laura Whitcombe on 13 March 2014.
Last updated on 13 March 2014

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 Moneycomms.co.uk, 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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