Lloyds TSB credit interest gets better then much worse!

Samantha Owens, Head of Personal Finance at Moneyfacts.co.uk, comments: “Lloyds TSB current accounts have been very much in the spotlight of late, with imminent sweeping changes to its fee structure and rate changes for overdrafts as well as some positive comment on its market leading credit interest deal.

“While a 6.22% credit interest rate was a market leading deal, to grab this deal you had to be quick off the blocks as it was only available to new customers applying between 29 August and 9 October. And whilst it is disappointing that this deal is no longer on offer, it is also masking a change for the worse.

“Before the launch of its impressive 6.22%, the account offered a respectable 4.17%, paying this on balances up to £5K. The rate has fallen back to 4.17% for new and existing customers, but importantly for their customer base, so too has the maximum balance it is payable on, now slashed by half to £2.5K.

“While for existing customers keeping small balances will be unaffected, those holding sums over £2.5K will undoubtedly be disappointed to see this cut in interest.

“With the top current account rates better than many savings accounts on offer, it can make sense to also use this account as a home for some of your savings. But take care not to invest too much. With the exception of the Coventry First account, which pays 6.17% on balances up to £250K, the top deals limit the best rates to the first £2.5K, and thereafter often pay a measly 0.10%.”