It’s Getting Harder To Fulfil the Requirements for High Interest Current Accounts

Written by Karen Bryan

I recently got caught out by not reading the change in terms and conditions to my Tesco Bank Internet Saver accounts. The change which would have the biggest impact on me was the end of the being able into a Tesco Bank Internet Saver account by direct debit.

In order to fulfil the requirement for two monthly direct debits to be paid from each of my Bank of Scotland Vantage current accounts, I had set up three direct debits for £1 from two of my Tesco Bank Internet Saver accounts.

So when I actually read the reminder of the change to the Tesco Bank Internet Saver accounts from 22 April 2018, I realised that I wouldn’t be earning any interest on my three Bank of Scotland Vantage current accounts, as I wouldn’t be fulfilling the requirement of the two monthly direct debits.

At present, I earn 2% interest on a maximum balance of £5.000 for each of the Bank of Scotland Vantage current accounts, as long as each account is credited by at least £1,000 month and two direct debits are paid out. This compares to earning 1.35% in interest on an instant access Tesco Internet Saver account. This equates to around £80 more per year in gross interest by having £15,000 in the three Bank of Scotland Vantage current account, compared to keeping the £15,000 in a Tesco Internet saver account.

I didn’t think that I couldn’t come up with six direct debits to move to the Bank of Scotland current accounts. I already pay household direct debits for council tax, water, electricity, gas, broadband and mobile phone from the Santander 123 current account in order to earn cashback on that account to almost cover the £5 monthly fee. I need two direct debits to earn the £3 a month from my Halifax Reward current account.

I  also reckoned that if I set up six more direct debits to charities, as I have done in other high interest current accounts, that the total paid out in direct debits to charities could well wipe out any extra interest earned in the Bank of Scotland Vantage current accounts.

I am so fed up of having to mess around so much to end up earning a rate of interest on my savings which is still well below the current rate of inflation.

All I want to achieve is to maintain the spending power of my savings, but that is nigh on impossible and getting harder by the day.

I can only hope that the rate of UK inflation falls and that the interest rates paid on savings accounts increases.