TSB slashes high interest rate on current accounts

The bank has announced the annual rate of interest paid on the Classic Plus Current Account will change to 3 per cent on balances up to £1,500 from July.

The lender previously hiked the current account interest rate to 5 per cent in May 2018 following the IT meltdown which left nearly two million customers unable to access their account.

To benefit from this increased rate, savers had to pay in at least £500 a month into their current account, be registered for online banking and chosen paperless statements and correspondence.

Now TSB has cut the interest rate by two percentage points and is writing to inform its customers of the changes.

The bank, which has 5.2 million customers across a range of its products, declined to say how many customers will be affected by the rate tumble but said the ongoing 3 per cent rate still compares well with competitors.

The bank is also offering £75 for referring a new customer to the bank, to a maximum of five people – giving you the potential to earn £375.