Business banking news review: week ending 12 June 2014
This week saw Tesco Bank throwing its hat in the ring officially with its new current account offering, prompting banks to step up their game in other areas.
For what it’s worth, I was chuffed to bits to see Tesco Bank unveil its current account – in a world where High Street personal and business bank account providers keep scaling back their offerings, it’s so nice to see a financial service provider improving access to customers instead of closing branches and generally just being bastards to their customers. It’s good news for Tesco Bank’s parent company as well, as anyone signing up for a new current account will be offered Clubcard credits; experts say it could revitalise flagging sales across the entire 3,000 outlet network of Tesco shops in the UK.
As far as the particulars of the current account offering, Tesco Bank is providing some highly competitive rates. The account is free to consumers that make a monthly deposit of at least £750, and on balances of £3,000 or less current account holders can earn a hefty 3 per cent interest rate – a figure that’s sadly higher than most savings accounts in this day and age.
The furore this is creating in the world of financial services is rather pronounced, if I do say so myself. Banks and building societies have been at a mad scramble to come up with their own deals, one such being The Co-operative’s new newly increased rate of return on its easy access saver. 0.15 percentage points later and the new return on The Co-op’s saver is 1.65 per cent – a paltry sum to be sure but the current best buy when it comes to easy access accounts.
Now maybe it’s just me but I find this figure absolutely embarrassing. Yes I know it’s an easy access saver and that you trade off higher rates of return for easy access to your cash, but that figure is so low that it’s completely insulting. Even worse is that it’s the best buy, which means that no other banks and building societies are offering a competitive deal even with such a minuscule rate of return.
This, ladies and gents, is exactly why people are switching to non-traditional banking providers like Tesco – they’re simply tired of High Street taking the piss out of them. I for one can’t blame them one bit.