Tesco Bank reopens 3% interest current account but tightens eligibility criteria

4 April 2017

Tesco Bank has reopened applications for its 3% interest current account, although new customers face restrictions if they want to earn the headline rate.

The supermarket giant was forced to halt applications for its current account in February due to an “unprecedented level of demand”. Tesco Bank has today reopened applications, but new customers face added restrictions.

The current account still pays 3% interest on balances up to £3,000, but new applicants must pay a minimum of £750 into their account each month and have at least three active direct debits paid out of the account on a monthly basis.

New customers who do not meet these rules will not receive any interest on their balance.

Existing Tesco Bank current account holders will continue to earn 3% interest without having to meet these criteria. This rate of interest is guaranteed for all customers until April 2019.

All current account holders will also earn one Tesco Clubcard point per £1 spent at Tesco on their debit card until 1 April 2019. This is in addition to collecting one Clubcard point per £8 spent outside of Tesco.

David McCreadie, managing director at Tesco Bank, says: “I am pleased to reopen applications for our unique current account guarantee designed to provide peace of mind to our existing customers by offering a guaranteed credit interest rate, allowing them to make a return on their hard earned money.

“Given the unprecedented response to the initial offer we made in February, there are a number of conditions new customers must meet to qualify for the credit interest benefit of this current account offer.”

How do Tesco’s rivals stack up?

Current accounts have become a popular way to save and the Tesco deal is up there with the best, despite these new restrictions.

Elsewhere, the Nationwide FlexDirect account pays 5% interest on balances up to £2,500 for the first year, but this drops to 1% thereafter.

TSB pays 3% interest on its Classic Plus current account, although this is only on balances up to £1,500.

Both these accounts also have minimum pay-ins and other restrictions. For the full details, read Moneywise’s guide to the week’s best current accounts.

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