Tesco’s new current account wants you to pay in a cheque when you grab some milk.
Today Tesco launched their own current account. They’ve had a banking arm for a while with savings and credit cards, but now they’re hoping to get you to switch your day to day account to them too.
They’re offering 3% AER interest on balances up to £3,000 which is better than many accounts, but you can get higher rates (read our guide to making your bank account pay).
You’d also get 1 Clubcard point for every £8 spent, or every £4 spent in Tesco. If you work on the assumption you’ll at least double the value of those when you exchange, it’s only 0.25%. That’s equivalent to a very low cashback rate, especially when compared to the best credit cards. Also you only earn them on each full £8 or £4 transaction. Read more about the best cashback credit cards.
There is a £5 monthly fee which is waived when you pay in £750 a month. *Update, the fee and minimum payment has been stopped.*
It’s also largely online, but you will be able to do basic transactions in selected stores. So it could be useful if you have lots of manual paying into do but don’t have a local bank.
Overall, it’s not a bad offer but I’d say there are far better current accounts out there. It’s good to be thinking about what your bank can do for you. If you haven’t already, do see if a switch will make you better off.