Two decent interest-paying current accounts from Lloyds and Bank of Scotland had their rates cut this weekend - while Halifax increased the monthly fee for its Ultimate Reward packaged account.

Here are the changes, which came in for new and existing customers, from Sunday 1 July 2018:

  • The Club Lloyds current account cut its headline interest rate from 2% to 1.5%.
  • Bank of Scotland's Vantage account also cut its rate from 2% to 1.5%.
  • Halifax's Ultimate Reward account increased its monthly fee from 15 to 17.

The changes were announced in the small print on the banks' websites, and we first reported them back in April in our MSE Lloyds and Bank of Scotland to Cut Interest News story.

For the current best-buy bank accounts, including 5% interest fixed for a year, see our Best Bank Accounts guide.

Martin Lewis
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How have the Club Lloyds and Bank of Scotland Vantage accounts changed?

The Club Lloyds and Bank of Scotland Vantage accounts paid 2% AER variable interest on up to 5,000, and both feature in our Best Bank Accounts guide.

But from 1 July 2018, both had their rates cut to 1.5% AER variable - meaning the maximum interest you can earn in a year fell from 99 to 74.50.

For Bank of Scotland Vantage, you need to pay in 1,000, stay in credit and pay out at least two direct debits each month to earn any interest. For Club Lloyds you need to pay out at least two direct debits each calendar month, and will have to pay a 3 monthly fee unless you pay in at least 1,500/month.

While the accounts were not market-leading, they have dropped further down our top picks list following the changes.

The best account for interest is Nationwide's FlexDirect account, which offers a rate of 5% AER on the first 2,500 of your cash, for the first year you hold the account. You can also open a linked 5% regular saver with this account.

See our Best Bank Accounts guide for more top-pick rates.

How has the Halifax Ultimate Reward account changed?

The Halifax Ultimate Reward account is one of our top-pick packaged accounts. For a monthly fee, it offers worldwide family travel insurance plus mobile insurance and UK breakdown cover for the account holder(s). The fee has increased from 15/mth to 17/mth as of yesterday.

Account holders will still receive a 3 monthly reward as a deduction on the account fee for each month they stay in credit, pay in at least 750 and have at least two direct debits leaving their account so if you do all that you'll pay 14/mth.

New customers who open a Halifax Ultimate Reward account currently receive a 75 switching bonus, so long as they use the Current Account Switch Service to fully switch from an existing account at another bank.

A couple of things are also changing with the mobile phone insurance you get. From Sunday:

  • The excess is 100 for all phones and claim types. It previously ranged from 30-100.
  • You are only able to make two successful claims per account holder in any 12 month period. There was previously no current limit to the number of claims you can make.

If you're looking for a packaged account, always do your sums to check if the account's really worth it. While the increased fee on the Halifax Ultimate Reward account will make it less attractive, it'll still likely be a good option for some, especially if you can switch and get the 75 boon.

If you don't want to switch, or have children, Nationwide's FlexPlus might be a better option, even before Halifax's fee increase. For 13/mth it offers worldwide family travel insurance, family smartphone insurance and UK and European breakdown cover. You can also get 3% AER variable interest on up to 2,500.

See our Top Packaged Bank Accounts guide for full info and more top picks and for the cheapest separate cover, see our Breakdown, Mobile and Travel Insurance guides.

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