Lloyds and Bank of Scotland to cut current account interest on up to £4,000 - MSE News

afmfifgh

eskbanker wrote: »

Not sure how they could have explained it any more concisely and clearly to be honest, but how would you have phrased "The accounts will pay 2% AER interest on the part of any balance between £4,000 and £5,000"

I would have done it how I already posted on the thread. I think my way explains it in an easier to understand way. They could have posted both.

Clearly how they have posted it isn't clear enough as people are getting confused.

eskbanker

afmfifgh wrote: »

I would have done it how I already posted on the thread. I think my way explains it in an easier to understand way. They could have posted both.

Clearly how they have posted it isn't clear enough as people are getting confused.

Your worked example of how the interest is calculated specifically on a balance of £5K unsurprisingly works for you, but obviously banks have to write such rules in a sufficiently generic and concise way as to apply to all scenarios.

18cc

I decided there wasn't much difference for me. I have £5k in the Club Lloyds account.

New scenario: £4k at 1% (£40) and £1k at 2% (£20) total interest £60.

If I moved it to a 1.5% savings account, I figured I would have to keep £1k in there anyway just to run the bank account so if I downgraded to a Classic account, kept £1k in there (zero interest) and put the remaining £4k in a 1.5% saver then I would get £60 interest ie the same.

Yorkshire_Pud

DennisTenus wrote: »

I think this article is very confusing.

So it's not 2% on the whole amount if you have £5K in the account?

It's only 2% on the max of £1K between £4K and £5K?

Yus its their way of making customers keep the full £5000 in the account to marginally improve the poor return. They used to give decent tiered rates to reward higher balances. Now they punish you if you don't keep a high balance. Plus you have to keep topping up to £5000 or keep a balance in excess of £5000 where you get no interest on the above £5000 amount.

These bankers didnt get rich by not exploiting their customers.

Yorkshire_Pud

18cc wrote: »

I decided there wasn't much difference for me. I have £5k in the Club Lloyds account.

New scenario: £4k at 1% (£40) and £1k at 2% (£20) total interest £60.

If I moved it to a 1.5% savings account, I figured I would have to keep £1k in there anyway just to run the bank account so if I downgraded to a Classic account, kept £1k in there (zero interest) and put the remaining £4k in a 1.5% saver then I would get £60 interest ie the same.

Good way of thinking! Always good to show your appreciation to banks when they do these reductions.

adindas

18cc wrote: »

I decided there wasn't much difference for me. I have £5k in the Club Lloyds account.

New scenario: £4k at 1% (£40) and £1k at 2% (£20) total interest £60.

If I moved it to a 1.5% savings account, I figured I would have to keep £1k in there anyway just to run the bank account so if I downgraded to a Classic account, kept £1k in there (zero interest) and put the remaining £4k in a 1.5% saver then I would get £60 interest ie the same.

I fail to understand why you need to keep 1k on your LBG accounts.

There is no need to downgrade it as you could keep the vantage Club Lloyds as it is. Just keep £5 (say above £0) balance on each calendar month and do SO from new AC to LBG account a few £ monthly to cover minimum DD requirement, if you need it.

Divert all of your money from LBG to other accounts paying 1.5%.
If you need a SO, DDs than you might consider upgrading your Santander 123 lite to become Santander 123 and divert all of your SOs and DD to Santander 123.

Consumerist

I suspect that interest on credit balances in current accounts will disappear altogether when the new restrictions on overdraft charges are brought in (from December, if I recall correctly). Personally, I will opt for a savings account instead - without all the hoo-haa of minimum payments, direct debits, etc to be bothered with.

oldagetraveller

A £25 - £400/month deposit into a Club Lloyds Monthly Saver could compensate a little for the drop in rate. Currently 2.5% fixed for 12 months from opening.

crumpetman

But you don't need to maintain a balance in the club Lloyds account to make use of the regular saver.

Descrabled

Am I reading the rules correctly:


1. Take all direct debits off the account.
2. Ensure that an overdraft of at least £100 (or better £400) is available.
3. Leave account permanently overdrawn at -£99.
4 Standing order weekly for £275 in and out.
5 £400 standing order credit once a month to cover regular saver.
6. Money through account of £1500 so no monthly fee.
7. Hope Lloyds don't close the account.



The account avoids account fee, provides cinema tickets, allows regular saver at £400 and gains annual interest of about £1.50 in a savings account.


Bit extreeme I know, but, but, it is money saving.
I haven't the nerve to try it!