Tesco Bank current account holders have until Monday to benefit from switching offers of up to £130 before their accounts are closed
Tesco Bank is closing its current account arm and users have until 11.59pm on Monday 15 November to start the switching process and benefit from cash bonuses of up to £130 offered by other providers. The bank will close all of its remaining current accounts on 29 November.
The warning for Tesco Bank customers comes after the supermarket giant's banking arm announced the forthcoming closure of its current accounts in July, citing a new strategy that focuses on products and services that "best meet the needs of Tesco shoppers". The bank withdrew its current account to newbies in December 2019.
Tesco Bank had temporarily declined switching requests from some existing customers between 2 August and 9 August after struggling with high demand following its announcement that accounts would close. However, it says these switch requests have now gone through and that it's able to process new requests as normal. There were around 213,000 Tesco Bank current accounts in July but it couldn't confirm how many are still active now.
We've full info below on what's happening but for full help on choosing a bank account, including the current crop of top picks, head over to our Best Bank Accounts guide.
If Tesco Bank customers use their accounts regularly they should switch NOW
Here's what you need to know:
- 11.59pm on Monday 15 November is the latest deadline to put in a switch request to move from a Tesco Bank current account and benefit from incentives of up to £130. When you switch using the Current Account Switching Service it takes seven working days and you can benefit from perks offered by banks - see below for a round-up of the current top deals. Using the switch service also guarantees closure of your old account and it moves your money, direct debits and standing orders across automatically.
- 11.59pm on 29 November is your last chance to transfer your account to a new one, but you won't benefit from switching offers. In this scenario you can't use the Current Account Switching Service and you'll instead need to open a new bank account and manually move over any direct debits and standing orders. You'll also need to remember to update your bank account details with your employer to ensure your salary gets paid on time. Once you've switched, your Tesco current account will automatically close.
- 11.59pm on 29 November is the deadline to close your account if you'll no longer use it. If you use the Tesco account as a secondary account or as a savings pot, you may prefer to close it instead of doing a full switch. To close the account, you'll need to have a zero balance, so if necessary withdraw any funds first.
Once your account's empty, you can close it by calling Tesco Bank on 0345 366 8818. When your account's closed any regular payments will be automatically cancelled, so make sure anyone you make payments to or receive them from has your new banking details.
If you're in your overdraft, you can still switch, though it will depend on whether the new provider will accept your application. If you want to close your account, you'll need to clear any overdraft first. If you're struggling to clear your overdraft or to switch, contact Tesco Bank on 0345 366 6468 – the bank says it can help by arranging a repayment plan that's affordable for you.
If you don't switch or close your account by 11.59pm on 29 November, it will automatically close from this time and Tesco Bank will write to you to confirm this. If there's any money in the account at the time, a cheque for the balance will be posted to your address.
Planning on switching? Get up to £130 in cash
Now happens to be a good time for anyone needing to switch as there are currently seven providers offering incentives for those who switch to one of their accounts. Here are two of the best available:
- Free £130 in cash for new customers, plus cracking service. First Direct* currently gives new customers switching to its 1st account a free £130. You also get access to a linked regular saver, which pays 1% AER variable on up to £300/mth, and many can get a £250 interest-free overdraft to boot.
How to get it: Apply by Monday 22 November, then within 90 days of opening, switch and pay in £1,000+. The bonus is then paid within 28 days. To count as a newbie you can't have had a First Direct account before, or opened a current account with HSBC since January 2018.
- Free £130 in cash for new and existing customers, plus 1%-3% cashback on most bills for a £2/mth fee. The Santander 123 Lite* currently gives switchers a £130 bonus, plus 3% back on water; 2% on energy and 1% on Santander mortgages, council tax, mobile, phone, broadband and paid-for TV, as long as you pay by direct debit and use digital banking. Cashback is limited to £5/mth per tier (so max £15/mth).
How to get it: Switch to a new or existing account (existing must be done in branch) by 11.59pm on Thursday 2 December, then within 60 days: have 2+ direct debits, pay in £1,000+ and use the mobile app. The bonus will be paid within 90 days of account opening. To qualify, this must be your first switch bonus from Santander, and you can't switch an account from Santander, Cahoot or Cater Allen.
See our Best Bank Accounts guide for full info and more options, including top accounts if you're overdrawn.
What to watch out for when your account's closed, including what happens to your Clubcard points
The Tesco Bank website has full info on how account closures will work, but there are a few key points to watch out for:
- If you DON'T have a separate Clubcard, you'll need to request one to keep earning points. Tesco's current account lets customers collect extra Clubcard points on their shopping – you get two points for every £1 spent online and in store at Tesco, double the amount you'd normally get using a Clubcard on its own. You also get one Clubcard point for every £8 spent elsewhere.
But once accounts close at the end of this month, your existing debit card will stop working. If you don't have a separate Clubcard, Tesco says you can call 0800 591 688 once your account is closed to request one. This will then be posted out to you with your existing points transferred over.
However, as the replacement will be a standard Clubcard, any new points you collect will be at the normal rate: one per £1 spent at Tesco and none elsewhere. There's more info below on your options to boost this.
- If you have a separate Clubcard, you can keep using it as normal. If you already have a separate Clubcard in addition to your debit card, these are linked, so you can continue using the Clubcard account as normal, including any points you've accrued through the current account.
- Your online statements won't be available after the account's closed. So print off or download any statements you may need. You can, however, request your transaction history going back five years once the account has closed.
- If you have a Tesco Fixed Rate Saver as well as its current account, you need to nominate a new account for interest to be paid into. Savings accounts aren't closing, but IF your savings interest is currently being paid into your Tesco current account, you'll need to let Tesco know the details of a UK bank account in your name to pay your interest into by calling 0345 678 5678 (you can't have the interest paid directly into the savings account itself).
You'll need another account to keep earning extra Clubcard points
If you want to keep earning extra Clubcard points after your current account is closed, you'll need to take out another product with Tesco Bank. There are a couple of options to consider – though unfortunately neither gives Tesco shoppers as many bonus points as the current account:
- Tesco's Clubcard Pay prepaid card. This isn't a full replacement for its current account – for example, it doesn't support direct debits and you can't switch to it. Instead, it's a more restricted debit card, which you can top up using any UK bank account and then use to shop in store and online.
It acts as your Clubcard when used in Tesco – meaning you don't need to swipe both. You collect two points for every £1 spent in Tesco in the first 100 days after opening your account and then one point per £1 after (the same as with a regular Clubcard). You'll also collect one Clubcard point for every £8 you spend elsewhere – the same as you would with the current account or with a Tesco Bank credit card. For more on how this works, see our full Clubcard Pay analysis.
- Tesco's Purchases credit card. Tesco has a range of credit cards which let you earn Clubcard points on your spending, but its Purchases card is our top pick. It gives an extra Clubcard point for every £4 spent at Tesco (in addition to the usual point per £1). So if, for example, you spent £4 at Tesco you'd get four points via Clubcard Pay (or eight points in the first 100 days) or five points on this Tesco credit card. You also get one point per £8 spent elsewhere. In addition, it offers up to 23 months' 0% interest on spending (but don't use this as an excuse to overspend).
It's worth noting that, in the long term, you may be able to earn much more using a specialist cashback credit card, provided you only use this for normal spending and pay it off IN FULL each month. For example, the Amex Platinum Cashback Everyday card, which is accepted at Tesco, gives newbies 5% cashback for the first three months, up to a max £100. After that, you get 0.5% back on spending up to £10,000 and 1% above that. Though bear in mind you need to spend at least £3,000 a year to get ANY cashback.
See our Credit Card Rewards guide for more info.