Lloyds TSB Plus vs Vantage

beniamino

I realised Lloyds TSB were 'paying' 0.1% interest on the balance in my Classic current account (usually about £1000), so looked around for an account which will pay some interest. I don't want to move away from Lloyds TSB at the moment.

Lloyds TSB seem to be heavily pushing the Vantage accounts. But they are a terrible deal because you effectively pay £50 p.a. (5% of £1000) in lost interest on the first £1000 credit.

Then I found the Classic Plus account, which pays 4% on balances up to £2500. The Plus account is hardly mentioned on the website -- perhaps because it's not a moneymaker for the bank? Should I upgrade to the Classic Plus? Or is there some downside which I haven't detected?

The bank's website contains a lot of marketing rip-off speak and makes it hard to find hard real information. :mad:

http://www.lloydstsb.com/current_accounts/classic_and_classic_plus_accounts.asp

Thanks for any advice,

Ben

TheAnalyst

beniamino wrote: »

I realised Lloyds TSB were 'paying' 0.1% interest on the balance in my Classic current account (usually about £1000), so looked around for an account which will pay some interest. I don't want to move away from Lloyds TSB at the moment.

Lloyds TSB seem to be heavily pushing the Vantage accounts. But they are a terrible deal because you effectively pay £50 p.a. (5% of £1000) in lost interest on the first £1000 credit.

Then I found the Classic Plus account, which pays 4% on balances up to £2500. The Plus account is hardly mentioned on the website -- perhaps because it's not a moneymaker for the bank? Should I upgrade to the Classic Plus? Or is there some downside which I haven't detected?

The bank's website contains a lot of marketing rip-off speak and makes it hard to find hard real information. :mad:

http://www.lloydstsb.com/current_accounts/classic_and_classic_plus_accounts.asp

Thanks for any advice,

Ben

The classic plus account with the 4% AER is about the best with Lloyds at the moment, what will !!!! you off a bit is that it was 6% AER until about a month ago :rolleyes:

fischer79

Surely depends how much money you have.

Vantage pays out on balances up to £7k and Plus only to £2.5k.
So £5k in Vantage would earn roughly £250 interst whereas in Plus it would be £125.
Also vantage pays no interest if you go overdrawn.

beniamino

fischer79 wrote: »

Surely depends how much money you have.

Vantage pays out on balances up to £7k and Plus only to £2.5k.
So £5k in Vantage would earn roughly £250 interst whereas in Plus it would be £125.

As I understand it, you'd always be better off with Plus and a savings account. Then, if you had £7k, and kept £1k in Plus and £6k in the savings account, you'd get more like £350-£400 gross. Vantage will always be a bad deal because you only get 0.1% on the first £1k. I can't see why anyone would go for it.

fischer79

You get the full rate on the whole balance.

so £1001 balance means you get 2% on all £1001.

In your example £7k in Vantage gets £350 vs. £1k in Plus gets £40 6K Internet saver with bonus £255.

So vantage better by £55

beniamino

Ah, I get it, thanks! Now I need to redo all my calculations :-)

Milarky

fischer79 wrote: »

You get the full rate on the whole balance.

so £1001 balance means you get 2% on all £1001.

Has this been confirmed by Lloyds? (No one is going to have held the account long enough to have checked their interest) The actual wording they use is:

Our Classic Account with Vantage offers the same great benefits as the Classic Account but also pays up to 5.00% AER (4.89% Gross). This higher rate is on balances between £5,000 and £7,000 but the rate varies depending on how much is in your account. See below for details.

Follow the (slightly wrong) link to the rate page and it say:

The first £7,000 of your balance will earn the interest rate in the table above. Any balance over £7,000 will receive the standard interest rate for your type of account.

This is ambiguous, but reference to 'the rate' (singular) 'in the table' - together with 'The first £7000'- just tilts me to the view that they mean you get one rate on the whole balance.

fischer79

The rate is calculated using closing balance each day and is based on the whole balance except when balance is above £7k where anything above is 0.1%.

beniamino

Having redone the calculations, Vantage still looks bad:

£1K Plus @ 4% = £40; £6K Savings @ 6% = £360; total £400
£7K Vantage @ 5% = £350

[I.E. Your £255 seems too low.]

I suppose the convenience might suit some people.

fischer79

Which LTSB savings account pays 6%. Best I can find is that internet saver at 4.25% for 6k balance?

beniamino

I was assuming shopping around for a halfway-decent rate for savings (of course you can easily do better than 6%, too). You're right that LTSB don't seem to offer any competitive savings rate.

Conclusion: For me personally, the right thing to do is have the Plus account and sweep as much as possible (and definitely anything over £2500) into a competitive non-LTSB savings account.

Thanks for your input!