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    • MSE Naomi
    • By MSE Naomi 8th Jul 19, 3:56 PM
    • 325Posts
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    MSE Naomi
    Lloyds and Bank of Scotland to cut current account interest on up to £4,000 - MSE News
    • #1
    • 8th Jul 19, 3:56 PM
    Lloyds and Bank of Scotland to cut current account interest on up to £4,000 - MSE News 8th Jul 19 at 3:56 PM
    Lloyds and Bank of Scotland will be cutting the interest paid on balances of up to £4,000 on their Club Lloyds and Vantage accounts from this autumn...
    Read the full story:
    'Lloyds and Bank of Scotland to cut current account interest on up to £4,000'

    Click reply below to discuss. If you havenít already, join the forum to reply.
Page 1
    • beefturnmail
    • By beefturnmail 8th Jul 19, 4:04 PM
    • 809 Posts
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    beefturnmail
    • #2
    • 8th Jul 19, 4:04 PM
    • #2
    • 8th Jul 19, 4:04 PM
    So an effective 1.2% on a balance of £5k then i.e. not worth it given you can earn 1.5% in an 'ordinary' savings account
    • badger09
    • By badger09 8th Jul 19, 4:13 PM
    • 7,533 Posts
    • 7,040 Thanks
    badger09
    • #3
    • 8th Jul 19, 4:13 PM
    • #3
    • 8th Jul 19, 4:13 PM
    More old 'News'

    https://forums.moneysavingexpert.com/showthread.php?t=6019262

    I'm not even sure if that was the first mention
    • afmfifgh
    • By afmfifgh 9th Jul 19, 11:10 AM
    • 273 Posts
    • 166 Thanks
    afmfifgh
    • #4
    • 9th Jul 19, 11:10 AM
    • #4
    • 9th Jul 19, 11:10 AM
    So an effective 1.2% on a balance of £5k then i.e. not worth it given you can earn 1.5% in an 'ordinary' savings account
    Originally posted by beefturnmail
    Isn't it 1.188% or 1.19% rather than 1.2%?

    Using the figures from the article you can earn with the new rates £59.40 on £5,000 which is 1.19% by my calculations.

    Or are you just rounding it up? I know the difference isn't much but I prefer to keep my spreadsheet as accurate as possible.
    • badger09
    • By badger09 9th Jul 19, 11:49 AM
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    badger09
    • #5
    • 9th Jul 19, 11:49 AM
    • #5
    • 9th Jul 19, 11:49 AM
    Isn't it 1.188% or 1.19% rather than 1.2%?

    Using the figures from the article you can earn with the new rates £59.40 on £5,000 which is 1.19% by my calculations.

    Or are you just rounding it up? I know the difference isn't much but I prefer to keep my spreadsheet as accurate as possible.
    Originally posted by afmfifgh
    That's a difference of 60p on £5k.

    By all means keep your spreadsheet 'as accurate as possible', but some people are struggling with the basic concept of the new rates, and most of us won't quibble over 60p
    • DennisTenus
    • By DennisTenus 9th Jul 19, 12:27 PM
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    DennisTenus
    • #6
    • 9th Jul 19, 12:27 PM
    • #6
    • 9th Jul 19, 12:27 PM
    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?
    • afmfifgh
    • By afmfifgh 9th Jul 19, 12:33 PM
    • 273 Posts
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    afmfifgh
    • #7
    • 9th Jul 19, 12:33 PM
    • #7
    • 9th Jul 19, 12:33 PM
    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?
    Originally posted by DennisTenus
    That is correct, the lower rate of 1% is paid on the first £1 to £4,000.

    Then the £4,000 - £5,000 earns 2%.

    So if you have a £5,000 balance £4,000 of that will be sat there earning 1% and only £1,000 will be getting 2%.

    I am sure many are reading it as 2% on the full £5,000. I did at first.
    • DennisTenus
    • By DennisTenus 9th Jul 19, 12:37 PM
    • 457 Posts
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    DennisTenus
    • #8
    • 9th Jul 19, 12:37 PM
    • #8
    • 9th Jul 19, 12:37 PM
    I am sure many are reading it as 2% on the full £5,000. I did at first.
    Originally posted by afmfifgh
    Exactly, me too. It's like they've made it as confusing as possible.

    Moving money.......
    • Wheres My Cashback
    • By Wheres My Cashback 9th Jul 19, 12:39 PM
    • 3,248 Posts
    • 38,214 Thanks
    Wheres My Cashback
    • #9
    • 9th Jul 19, 12:39 PM
    • #9
    • 9th Jul 19, 12:39 PM
    More old 'News'

    https://forums.moneysavingexpert.com/showthread.php?t=6019262

    I'm not even sure if that was the first mention
    Originally posted by badger09
    Now you know why MSE has forums ?

    A lot of the info put out by MSE has already been in the public domain for a while, within these and other forums.

    They just 'collect' the info, collate it and highlight it into one place.
    • eskbanker
    • By eskbanker 9th Jul 19, 12:58 PM
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    eskbanker
    I am sure many are reading it as 2% on the full £5,000. I did at first.
    Originally posted by afmfifgh
    Exactly, me too. It's like they've made it as confusing as possible.
    Originally posted by DennisTenus
    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" (as opposed to "x% on the entire balance if between £yK and £zK" which IIRC is how they used to explain their old tiering structure several years ago)?
    • DennisTenus
    • By DennisTenus 9th Jul 19, 1:02 PM
    • 457 Posts
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    DennisTenus
    Or they could have just made it same % not tiered, which makes hardly any difference as it is
    • afmfifgh
    • By afmfifgh 9th Jul 19, 1:49 PM
    • 273 Posts
    • 166 Thanks
    afmfifgh
    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"
    Originally posted by eskbanker
    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
    • By eskbanker 9th Jul 19, 2:42 PM
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    eskbanker
    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.
    Originally posted by afmfifgh
    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
    • By 18cc 9th Jul 19, 3:10 PM
    • 1,910 Posts
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    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
    • By Yorkshire Pud 9th Jul 19, 3:51 PM
    • 1,028 Posts
    • 683 Thanks
    Yorkshire Pud
    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?
    Originally posted by DennisTenus
    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
    • By Yorkshire Pud 9th Jul 19, 3:56 PM
    • 1,028 Posts
    • 683 Thanks
    Yorkshire Pud
    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.
    Originally posted by 18cc
    Good way of thinking! Always good to show your appreciation to banks when they do these reductions.
    • adindas
    • By adindas 9th Jul 19, 4:13 PM
    • 4,234 Posts
    • 2,709 Thanks
    adindas
    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.
    Originally posted by 18cc
    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.
    Last edited by adindas; 09-07-2019 at 4:18 PM.
    • Consumerist
    • By Consumerist 10th Jul 19, 11:17 AM
    • 5,277 Posts
    • 2,639 Thanks
    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.
    Warning: In the kingdom of the blind, the one-eyed man is king.
    • oldagetraveller
    • By oldagetraveller 10th Jul 19, 11:22 AM
    • 3,474 Posts
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    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.
    R.I.P. U.K. Democracy.
    • crumpetman
    • By crumpetman 10th Jul 19, 5:38 PM
    • 321 Posts
    • 612 Thanks
    crumpetman
    But you don't need to maintain a balance in the club Lloyds account to make use of the regular saver.
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