TSB to cut interest rate on its current account to 3%
TSB has announced it's cutting the interest rate on its Classic Plus current account from 5% to 3% this summer – and it's temporarily reviving its £75 switching incentive for those who refer friends and family to the bank.
TSB upped the interest rate on its Classic Plus account from 3% to 5% on balances of up to £1,500 last May while it was affected by a number of IT problems, but this will drop back to 3% from 2 July.
This means customers will be able to earn a maximum of £45 in interest per year, down from £75 at the moment.
TSB's also bringing back its 'refer a friend' scheme from today, where customers can earn £75 by referring family and friends – the scheme will run until the end of June.
See our Best Bank Accounts guide to find the best interest-paying current accounts and switching incentives, including £135 in cash or £180 in vouchers.
How can I earn interest with TSB?
TSB's Classic Plus account currently pays 5% interest on balances up to £1,500, dropping to 3% on 2 July.
The interest is paid monthly, but to be eligible for the interest, you'll need to pay in a minimum of £500 per month (equivalent to a £6,000 annual salary), register for online banking and paperless statements, and log into your online account regularly.
If you don't meet these criteria, you won't be paid any interest for that month.
How can I refer a friend?
From today, customers can earn £75 when they refer a friend who switches their account to TSB's Classic or Classic Plus account from a different bank. The person who's referred will also get £75.
Current account customers can recommend up to five friends, meaning in theory you could net £375 through referrals – but you'll need to be quick as the offer's only running until 30 June.
To claim the cash, you'll need to fill in your details to receive an email link to send to family members and friends.
They'll then need to apply for a Classic or Classic Plus account by 30 June, and switch using the Current Account Switching Service by 26 July.
Once they've switched, they'll have 28 days to pay in £500 and set up two active direct debits, before you're each paid the £75.