10th June 2014
Tesco has today finally launched its own salvo into the UK’s current account market where it is offering one Clubcard point for every £4 of debit card spend in store and every £8 elsewhere.
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The offering from the UK’s largest supermarket chain follows M&S’s recent launch and according to the experts Tesco has brought out a “solid offering” where their account, alongside its Clubcard rewards is providing 3% interest on in-credit balances up to £3,000.
The minimum monthly deposit of £750 is also viewed as competitive, with TSB being the only other interest-paying current account provider to beat it, with its product requiring a minimum £500 lodgement every month.
Kevin Mountford head of banking and credit cards at comparison site MoneySuperMarket.com highlighted however that its arranged overdraft rate of 18.9% is quite high given this is a product which is clearly being targeted at families who are often on tight household budgets.
He said: “But while its approach to overdrafts is transparent, the lack of an ‘interest free’ buffer means there may be better offerings for those who regularly slip into the red. And with lots of transactions going in and out of their account every day, this can make it hard to keep track of their account balance.
“The rewards element of the Tesco Current Account is also not as generous as that offered on the Tesco Credit Card, so to get the most bang for your buck, it is best to use a combination of the two.”
Jafar Hassan, personal finance expert at uSwitch.com, added: “The account is likely to grab the attention of those currently getting nothing back from their bank.
“The minimum monthly deposit of £750, no requirement to set up any direct debits and no fee should make the account more accessible to those keen to switch banks but previously put off by the long list of requirements and charges.”
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