Tesco Bank current account pays 3% interest reopened – but there are a few catches
New applicants will need to pay in £750 per month and set up three direct debits to get the 3 per cent interest offer
Tesco Bank has reopened applications for its current account paying 3 per cent interest - but there are a few hoops to jump through if you want to get it.
The supermarket bank launched the account in February but pulled the offer eight days later after being swamped with applications.
It pays a maximum of 3 per cent interest on balance up to £3,000 until at least 1 April 2019.
Tesco has added a few caveats for new applicants, which make it a bit harder to get.
To get the interest new customers must put £750 into their account each month.
They must also have at least three direct debits paid out of the account each month and this excludes payments to a Tesco Bank savings account.
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Existing customers and those who applied for the account before February 10 are unaffected by the changes.
Customers can also earn Clubcard points when using their debit card.
David McCreadie, managing director of Tesco Bank, said: "Given the unprecedented response to the initial offer we made in February, there are a number of conditions new customers must meet to qualify for the credit interest benefit of this current account offer."
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Tesco's move bucks a trend of current account providers slashing their rates or trimming back rewards in the low interest rate environment after the Bank of England base rate fell to 0.25 per cent in 2016.
Halifax has previously cut the £5 per month paid to its Reward current account customers who fulfil certain criteria to £3.
Santander has halved the 3 per cent rate on its flagship 123 current account to 1.5 per cent.
Lloyds Bank has cut its Club Lloyds credit interest rate from 4 per cent to 2 per cent while TSB reduced a 5 per cent rate on its Classic Plus account to 3 per cent.
Nationwide Building Society continues to offer customers 5 per cent on balances up to £2,500 for the first 12 months.
When it first launched its current account in 2014, Tesco Bank chief executive Benny Higgins said it would bring a "fiercely competitive" customer focus from the retail sector which did not exist in banking.
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