Pay £3 a month for £5 cashback: TSB unveils its new ‘premium’ current account which pays customers LESS than its free version
- Its ‘Spend & Save Plus’ account costs £3 and pays £5 cashback
- Customers must make 30 debit card purchases in order to earn the cashback
- The fee wipes out 60% of what is earned and the maximum £24 which can be earned in a year is less than the £30 which can be earned from its free account
TSB has launched a new cashback-paying current account with a monthly fee which wipes out 60 per cent of what its holders can earn.
Its ‘Spend & Save Plus’ account pays holders £5 cashback a month if they make 30 debit card payments and comes with a £100 interest-free overdraft and no fees when using the card or withdrawing cash abroad.
But it comes with a £3 monthly fee, cutting the maximum cashback which can be earned to just £24 a year.
Despite billing it as a ‘premium’ style account, aside from the limited cashback, overdraft buffer and no overseas fees, it comes with no other features which aren’t already available through its free account.
The monthly fee on TSB’s new ‘Spend & Save Plus’ account cuts the cashback earned by customers by 60%
Customers can even earn more cashback with the no-fee ‘Spend & Save’ account, which pays the same £5 monthly figure for the first six months.
Because of the lack of a fee, customers would earn £30 if they made 30 debit card purchases each month for six months, more than the £24 they would earn in a year from its ‘Premium’ account after the £3 monthly fee was taken into account.
The cashback replaced in-credit interest paid on balances of up to £1,500, which TSB stopped paying last December when it scrapped its ‘Classic Plus’ account.
The new Spend & Save account lets customers set up savings pots which pay 0.01 per cent interest on up to £5,000 after a year and round up spare change, features already previously introduced by smartphone banks like Monzo.
Borrowing beyond the £100 interest-free buffer is charged at 39.9 per cent APR, the same rate charged by other high street banks like HSBC, Lloyds and Nationwide Building Society.
The requirement to make 30 debit card transactions, or roughly one a day per month, to qualify for the cashback could also see customers spend unnecessarily to reach the goal.
TSB was ranked the third-worst bank in Britain in the latest current account rankings from the Competition and Markets Authority.
Just 53 per cent of customers would recommend it to their friends and family, according to the rankings published this month, putting it ahead of only Royal Bank of Scotland and Tesco Bank.
Latest figures from the Current Account Switching Service show it lost a net 5,005 customers between July and September last year of those using the seven-day service.
Only HSBC, Santander and NatWest performed worse.
Current account perks have increasingly disappeared in recent years, and the last 12 months in particular.
Last month Santander announced the third cut to the interest paid to customers of its flagship 123 Account since January 2020.
Customers will earn just 0.3 per cent on up to £20,000 from April, down from 1.5 per cent this time last year.