Lloyds Bank Club Lloyds current account holders will be dismayed to find their in-credit interest rate is being cut.
This will fall from 2% AER to 1.5% on balances between £1 and £5,000, affecting all new and existing customers from the end of this week (1 July).
Despite the cut, the bank says customers will retain all the other benefits that come with the account. A spokesperson for the provider says: “Our Club Lloyds account continues to recognise customer loyalty through the associated benefits and rates available exclusively to customers. With both an exclusive increased saving rate and an exclusive discounted mortgage rate, credit interest is only one of the considerations of the Club Lloyds account.
“We regularly review our accounts, making changes as appropriate.”
If you’d like a current account that pays a high interest rate there are alternative options that pay higher rates than the Club Lloyds account.
The current best buy is Nationwide FlexDirect, which pays 5% interest on balances up to £2,500. However, this rate is an introductory bonus, and drops to just 1% after 12 months.
The TSB Classic Plus Account meanwhile, pays 5% on balances up to £1,500. You’ll need to pay at least £500 a month into the account and register for internet banking to get the rate. Unlike Nationwide, this rate doesn’t disappear after 12 months.
The next best rate comes from the Tesco Bank Current Account, paying 3% on balances up to £3,000. This rate is guaranteed until 1 April 2019. Debit card spending is also rewarded with Clubcard points at £1 for every point spent in Tesco, plus one point for every £8 spent elsewhere.