Lloyds TSB targets current accounts

23 November 2003
Lloyds TSB has upped the stakes in the battle of the UK's biggest high street banks by announcing it will pay up to 4.5 per cent interest on current account balances.

However, the offer will only be made available to new customers, with existing clients paid a lower rate of 3.5 per cent.

Head of consumer lending and current accounts at Lloyds, David Gagie, defended the bank's two-tier pricing strategy, claiming it offered the best current account interest rate on the high street.

'We are offering a promotional offer to new customers until the end of 2004, but existing customers still get a fantastic deal,' he said.

Existing customers who upgrade to a Plus account or already have one will be paid 3.5 per cent interest if they credit their account with £2,000 a month, up from 3.2 per cent previously, and 2.5 per cent if they pay in £1,000.

Rebecca Fearnley, principal researcher at consumer magazine Which?, said: 'It would be preferable to see them offer it to all their customers, and if I was an existing customer I would feel pretty miffed about it. We would hope banks would reward loyalty rather than the other way round.'