TSB’s Classic Plus can now pay £295 in your first year, making it the most lucrative bank account – here’s how to get your hands on the cash
TSB has sweetened the deal on it’s Classic Plus Account, offering £130 cash to anyone who switches before July 14.
The new sign-up perk means anyone moving their account to the bank can pocket up to £295 in the first year, if they also take advantage of the bank’s existing in credit interest and monthly cashback offer.
The new deal pushes the it to the front of the pack – it’s now the most lucrative account for first year earnings.
To take advantage of the cash carrot switchers have to sign up through comparison site MoneySupermarket and use the Current Account Switching Service.
Cash in your pocket: TSB offers a total £295 over the first 12 months
You will also have to move a minimum of two direct debits and pay in at least £500 within the first 28 days.
There is no monthly fee for the Classic Plus Account but it requires a £500 monthly deposit.
This is, however, much less than some rival deals as some banks require up to £1,500 each month to maintain account benefits or avoid annual account fees.
With savings rates stuck at all-time-lows, current accounts are one of the few ways left to earn inflation-beating interest.
The TSB account already offers interest of 3 per cent on the first £1,500 in your account.
But the new cashback perk pushes this up to the equivalent of around 18 per cent interest on your £1,500 pot in the first 12 months.
Putting the same amount into the best-buy easy access current account from RCI Bank, paying 1.1 per cent, would earn a measly £16.58 over the course of a year.
So how can I earn £295?
Banking customers able to keep the the full £1,500 in their account for the first year can earn £45 in interest with TSB.
In addition the bank offers two monthly cashback perks which last until June 2018, both worth £5 each and a total of £120.
To get the first £5 you simply need to maintain two active direct debits out of the account.
The second £5 reward is offered for using your debit card at least 20 times each month. This includes Apple Pay and Android Pay transactions.
This all adds up to a potential £295.New customers are limited to one single and one joint account.
This means a couple could potentially pocket nearly £900 over the course of the year, if they take out a single account each plus a joint account.
However fulfilling the criteria for all three accounts might be tricky, particularly when it comes to making the 20 debit card payments for each account, each month.
After all, spending money that you don’t need to in order to earn a reward is a false economy.
Remember after the first year you won’t earn the extra £10 monthly reward, this drops annual earnings to just £45 through the 3 per cent interest deal.
Shop around again at the end of the 12 month deal to make sure you are getting the best deal.
Best-buy deal: TSB switchers earn more than those moving to rival banks
How does TSB compare?
The new cash incentive pushes TSB ahead of rivals when it comes to potential first year earnings from both in credit interest and cash incentives.
First Direct currently offers the largest cash carrot for moving bank accounts at £125 – again this deal can only be found when switching through a comparison site, such as with the MoneySupermarket link above, otherwise you get £100.
M&S Bank offers a total of £185 in M&S vouchers in the first year. This includes a £125 gift card for joining via its switch service, and an extra £5 a month for the first year.
With Co operative Bank you up to £176 in the first year. It pays £110 to sign up and up to £5.50 in monthly rewards including 5p (up to £1.50) each time you use your debit card
Halifax offers £75 to switch plus a £3 monthly bonus, earning £111 in 12 months on its flagship Reward Account.
When it comes to in credit interest there are a handful of accounts which offer higher rates or pay interest on larger pots than TSB.
But the bank’s new cash boost means its combined offers earn more in the first year despite it’s lower rate.
Santander’s 123 Account pays interest on the largest balance. You get 1.5 per cent on up to £20,000 plus it offers up to 3 per cent tiered cashback on household bills – but the account comes with a £5 monthly fee.
Nationwide has the highest in credit interest rate, paying 5 per cent on up to £2,500 for the first year, worth £125.
>In the market for an interest-paying account? Check out This is Money’s round up of the best accounts