Lloyds TSB cuts overdrafts fees on current accounts

Lloyds TSB to cut unauthorised overdraft fees by up to half, but also stops paying interest on current accounts.

Markets

Other markets

Market Data Notice

More market charts

by Tony Bonsignore on Jun 24, 2010 at 14:46

Lloyds TSB current account holders will see their overdraft fees cut by at least a half by the end of the year, the state-owned bank said today.

The current monthly ‘unplanned overdraft fee’ of £15 will be scrapped on 2 December, and replaced by a £5 ‘overdraft usage fee’ for any customer that goes into the red - whether planned or unplanned.

The bank’s ‘returned item fee’ is also being halved, to £10 from £20, while all Lloyds TSB customers will benefit from a £10 fee-free and interest-fee ‘buffer’.

However the bank has also announced that it will cease paying any interest on money held in ordinary current accounts. It currently pays 0.1% on all positive balances.

The interest paid on ‘Vantage’ and ‘Plus’ accounts, meanwhile, will be reduced to 0.5%.

Full details of the changes can be found here.

‘All customers who use an unplanned overdraft facility will pay less under the new structure,’ said Mike Regnier, personal current account director at Lloyds TSB.

‘Almost 70 per cent of customers who use an unplanned overdraft will pay less than half what they currently pay.’

Email a friend

Email me when someone comments on this article Print

3 comments so far. Why not have your say?

Is Lloyds "State-owned" I thought their share holding was 41% ?

report this

........The interest paid on ‘Vantage’ and ‘Plus’ accounts, meanwhile, will be reduced to 0.5%.......

....incorrect, see below.....

If you have a current account with Vantage, you will still earn interest on the first £7,000 in your account as long as you meet the Vantage conditions of staying in credit during the billing period and paying in at least £1,000 per calendar month. However, you’ll no longer receive 0.1% AER/Gross* credit interest on amounts over £7,000 or when you don’t meet these conditions. As all of the other interest rate tiers are staying the same, Vantage still offers very competitive interest on your current account.

If you have a current account with Plus you’ll still earn interest on the first £2,500 in your account as long as you meet the Plus condition of paying in at least £1000 per calendar month. However, you’ll no longer receive 0.1%AER/Gross* credit interest on amounts over £2,500 or when you don’t meet this condition. We’re also changing the interest rate on balances of up to £2,500 so you’ll now receive 1.5% AER/1.49% Gross*.

report this

Derek McCormick

Jun 24, 2010 at 19:03

I think Tony Bonsignore shhould get his facts right before starting a "saver's" panic. I checked with LloydsTSB, and Ian Phillips is absolutely right. The interest rate for current account with Vantage is still at 4% on balances of £7000.

Please don't do this to us Mr Bonsignore! it is bad for a pensioner's heart.

report this

Please sign in here or register here to comment. It is free to register and only takes a minute or two.