Tesco Current Bank Account

newuser78

Managed to sign up for a current account with Tesco which pays 3% interest of up to £3k.

First day the account became active, I put the whole 3k into the account.

Due to interest, the balance is now £3004.62 (exciting!), does this mean that I no longer get 3%? E.g. do I need to take £4.62 out of account?

eskbanker

You will get interest on the £3K if the balance is higher than this so there's no need to transfer the surplus (other than to earn some interest elsewhere of course).

teddysmum

You had me all excited, then, expecting that they were open for new accounts again....but they aren't.:(

Katiehound

With any of the accounts that say interest paid on £3K, £1.5K whatever, the interest is paid on up to that upper limit but not on any money over.

If I remember rightly Lloyds Club a/c t&cs were worded in such a way that it sounded as if you had over £5K in the account you would receive nothing! I even queried that fact- badly expressed.

where_are_we

You only earn 3% interest on balances up to £3000 - more than this and you earn 0% on the amount above £3000. "Skim" off the excess each month and put it in another account which pays interest. You should get about £7.54 interest each month which will vary depending on the length of the month. Tesco are unusual in that they pay out interest on the anniversary of opening the account rather than at the beginning of each month, so remember this date.

grumbler

where_are_we wrote: »

"Skim" off the excess each month and put it in another account which pays interest.

If another account pays the same 3%, you'll get whopping extra 0.045% on £3K, i.e. ~£1.35 over a year.

mgdavid

newuser78 wrote: »

Managed to sign up for a current account with Tesco .........

but didn't bother to read the Ts & Cs you've agreed and signed up to....

cheesetoast

Katiehound wrote: »

If I remember rightly Lloyds Club a/c t&cs were worded in such a way that it sounded as if you had over £5K in the account you would receive nothing! I even queried that fact- badly expressed.

Indeed - the statement made it very unclear:

newuser78

mgdavid wrote: »

but didn't bother to read the Ts & Cs you've agreed and signed up to....

Did you get out of the wrong side of bed? :whistle:

I did read the T&Cs but it was the wording that confused me. Some accounts stop paying interesting if you go over X, and some will continue to pay interest on X. So both eskbanker and Katiehound are correct.

eskbanker

newuser78 wrote: »

Some accounts stop paying interesting if you go over X, and some will continue to pay interest on X.

I'm only aware of the latter model, which accounts fall into the former category?

grumbler

newuser78 wrote: »

I did read the T&Cs but it was the wording that confused me. Some accounts stop paying interesting if you go over X, and some will continue to pay interest on X. So both eskbanker and Katiehound are correct.

I have to say that Tesco's wording is extremely clear:

What will you pay me when I have money in my account?
If you have money in your account, we’ll pay the following interest on the first £3,000 of your balance, but you won’t get interest on any part of your balance over £3,000