Tesco takes on high street banks with launch of its first current accounts

Tesco Bank's first current accounts offer 3% interest plus extra Clubcard points to lure in more customers.

16:05 10 June 2014

Tesco Bank has finally launched its long-awaited first current account offering 3% interest plus extra Clubcard points to lure more customers. 

 

The supermarket’s banking arm, according to its chief executive Benny Higgins, is poised to challenge high street banks. 

 

As for its initial offering, it will pay 3% interest on balances up to £3,000. It will also offer extra clubcard points when customers use their debit card in and out of Tesco. Meanwhile, its instant access online savings account pays 1.35% interest.

 

With this offer, Tesco hopes to win dissatisfied customers who have lost faith in rival, more established banks whose reputations have been tarnished in recent years. 

 

To date, Tesco has already 6 million financial customers across its savings, mortgage, credit cards, loans, and insurance business. 

 

Tesco's chief executive said: "When we asked customers what they wanted us to do next, they said you need a current account, because if you don’t have a current account you’re not credible as a bank."

 

He added that a number of banks right now do not pay customers with any reward whatsoever. He also said that many bank accounts involved “smoke and mirrors.”