Tesco Bank has become the first bank in the UK to make clear to customers if they have money in their current account that is not earning credit interest. Customers’ monthly statements will show ‘foregone interest’ – the amount of interest they would have earned if they had transferred their current account balance into the bank’s instant access savings account.
Tesco noted that the Competition and Markets Authority said UK banks generated £3.2 billion from foregone interest in current accounts alone – an average of just under £50 per customer. The CMA is currently investigating the UK current account market and will publish their interim report in September.
The bank said while its current account paid three per cent interest on balances up to £3000, more than 80per cent of current accounts paid no credit interest.
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