Lloyds ramps up current account competition with launch of new product

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Competition in the current account market has been ramped up further as Lloyds Bank unveiled a new product with a four per cent rate of interest and confirmed it is putting its paid-for packaged accounts back on sale in branches.

The new Club Lloyds current account will pay a tiered interest rate of up to four per cent on balances up to £5,000 and will give customers access to a range of other perks including savings and mortgage deals, cinema tickets and restaurant discounts.

The deal is the latest in a new wave of current accounts which are offering savers more attractive returns than those being seen on many savings accounts.

Lloyds also confirmed that it is to put paid-for current accounts back on sale in branches after pulling the plug just over a year ago.

Customers have still been able to apply for Lloyds’ paid-for silver and platinum accounts online and from Monday, when the new Club Lloyds current account launches, they will also reappear in branch.

The Club Lloyds account is available “free” to new and existing customers who use it as their main current account, by paying £1,500 in a month and setting up two direct debits a month. Anyone who does not want to do this can still get the current account but they will need to pay in £5 a month.

Customers will get one per cent interest on balances from £1 to £1,999.99, two per cent interest on balances between £2,000 to £3,999.99 and four per cent interest on balances of £4,000 to £5,000.

They will also have access to a monthly savings account which pays four per cent interest on savings of up to £400 each month, a mortgage rate reduction of 0.20 per cent and a range of “lifestyle benefits” including six cinema tickets a year, an annual magazine subscription or access to discounts at more than 6,000 restaurants with an annual Gourmet Society membership.

Kevin Mountford, head of banking at comparison website MoneySuperMarket, said: “This account is particularly attractive if you keep a high balance on the account, and the additional benefits and the opportunity to get a decent regular saver’s rate on savings, means it may be attractive to many consumers.”