Earn 4% interest with Lloyds Vantage current accounts
The new market-leading rate from Lloyds gives you the chance to earn over £235 in a year from your current account.
Lloyds TSB is offering new and existing customers the chance to earn up to 4% in credit interest on its current accounts with Vantage.
New and existing customers can add Vantage to the bank’s range of current accounts for free in order to get access to a market-leading rate.
Tiered levels of interest up to 4% are available dependent on how much money you keep in your account.
The interest rates on offer
On balances between £1 and £999 you can get 1.5% paid in credit interest. Keeping between £1,000 and £2,999 allows you to earn 2%. If you are able to maintain a balance of £3,000 up to £4,999 you are rewarded with 3%.
But store between £5,000 and £6,000 and Lloyds will pay a market leading 4%. That’s better than most savings accounts!
In fact, to achieve a rate of 4% you would have to lock away your cash in a bond for at least three years. Check out Sainsbury's pulls new savings bonds after just 24 hours for more.
So if you’re able to maintain a massive balance of £6,000 every month for a year, you have the potential to earn £235.80 in interest, before tax.
This is a fantastic deal when you consider that the average credit interest rate for a current account at the £5,000 threshold is just 0.32%, according to Moneyfacts.
Conditions of the account
In order to start earning you have to meet certain conditions. Lloyds requires that you deposit at least £1,000 a month and keep the account out of the red in order to earn up to 3%. But to get access to the top rate of 4% you will also have to set up at least two direct debits on the account.
Not for everyone
For most people on average salaries with average outgoings, this top rate of interest is unlikely to be paid out. So it's not for everyone.
However, Lloyds still rewards those only able to maintain a smaller amount by paying 1.5% on balances as tiny as £1. So even if you have practically nothing in your account, you could still be making money. This is comforting, especially if you consider that most banks and building societies don’t pay any credit interest at all at the moment because of the low base rate.
Other current accounts that pay
Lloyds is not the only bank that offers rewards for staying in credit.
The Santander 123 Current Account also pays a tiered level of interest depending on the balance of your account. You can get 1% paid on balances between £1,000 and £2,000, 2% if you have between £2,001 and £3,000 or 3% if you can keep over £3,001 in your account every month.
On top of that Santander offers tiered levels of cashback on bills that you pay out of the account as well. So you could earn 1% on your water and council tax outgoings, 2% on gas and electricity and 3% on bills for communication (like mobile, home phone, broadband, TV packages etc.)
For those that find their cash disappears as soon as they are paid, the Halifax Reward Current Account could be more appropriate. As long as you pay in at least £1,000 each month you will get £5 cashback - so even if you spend it all you can still get £60 a year.
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