Bank of Scotland to cut Vantage interest rate – should you move your current account?

8 June 2017

Bank of Scotland will cut the headline rate offered on its Vantage current account this weekend, so is it time to move your money?

From Sunday 11 June 2017, the bank’s Vantage account holders will be paid a flat 2% interest rate on all balances up to £5,000.

This replaces the current tiered system where customers are paid 3% interest on balances between £3,000 and £5,000, 2% on balances between £1,000 and £3,000, and 1.5% on balances of less than £1,000.

The change means an account holder with a £5,000 balance, for example, will see their annual interest earnings slashed from £150 to £100.

There are, however, no changes to the account’s eligibility criteria. Customers must continue to pay at least £1,000 into their account, stay in credit, and pay out at least two different direct debits each calendar month.

The move will affect all new and existing customers who hold a Classic Vantage, Silver Vantage, Gold Vantage, Platinum Vantage or Premier Vantage account.

What other options are there?

Customers unhappy with the rate change should consider moving accounts. 

If you’re after the highest interest rate, Nationwide’s FlexDirect account pays 5% interest on balances up to £2,500, although this rate drops to 1% after a year.

Tesco Bank meanwhile, offers 3% interest on balances up to £3,000, plus bonus Clubcard points when you spend in Tesco. The TSB Classic Plus pays 3% interest on balances up to £1,500 and new customers can earn £5 cashback every month for having two direct debits set up, plus another £5 cashback if you spend with your debit card 20 times a month.

If you have a bigger balance then the Santander 123 Current Account pays 1.5% interest on balances all the way up to £20,000. This account also offers cashback on household and utility bills but beware the £5 monthly fee.

Can I get a current account switching bonus?

A number of providers also offer cash incentives to move your current account providing you use the Current Account Switching Service. The Co-operative Bank’s current account pays the most in cash at £110 - switchers can also earn up to £5.50 each month in cashback once the account is open - but you must have four active direct debits and pay in £800 each month.

First Direct’s 1st Account offers £100 to switch and a further £100 if you leave within six months. To qualify, you’ll need to transfer and deposit at least £1,000 in the first three months.

Halifax pays anyone who switches to its Reward Current Account a £75 up-front bonus, plus a £3 reward each month you pay in £750 or more, pay out at least two different direct debits and stay in credit. The same introductory bonus is available on its Ultimate Reward Account, although that charges a £10 monthly fee.

M&S Bank offers a £125 M&S voucher to new current account switchers, plus a £5 M&S voucher each month for a year, providing you pay in at least £1,000 a month. The deal is also available on M&S’s £10 a month Premium Account.

Each of these accounts has requirements such as minimum pay-ins. For the full details of each product read Moneywise’s guide to the week’s best current accounts .

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