TSB introduce current account cash back
TSB's Current Account Plus customers can now benefit from cash back of up to £60 a year, on top of getting 5% interest on in credit balances.
Account holders will qualify for 5% cash back on the first £100 of any contactless payments they make each month, until the end of December 2016.
What's more, the incentive is available to people who may have the Plus account but don't pay in the minimum £500 a month required to get the 5% interest rate.
TSB are also trying to tempt Current Account Plus holders to start saving regularly with them by offering 5% interest on a special Monthly Saver account.
Stay in touch
The introduction of the 5% cash back for contactless payments comes at an interesting time.
Both Mastercard and Visa have reported a massive surge in the popularity of contactless spending over the past year.
TSB themselves say they processed more than 1.7 million contactless payments in July alone.
Even more shops and service providers are expected to come on board now the maximum amount we can spend using "wave and pay" has increased from £20 to £30.
That said, retailers already offering contactless payments need to update the software their terminals use before they can carry out transactions of more than £20; most should be ready by the end of October.
There's also the fact that current account cash back schemes tend to be slightly more complicated than this.
For example, Halifax's Reward current account (reviewed here) only offers cash back on spending in certain places, and relies on the account holder activating offers before they spend.
Santander's 123 current account pays cash back on essential bills, from 1% for mortgage payments and council tax, up to 3% on mobile, broadband and TV packages.
Straightforward cash back for purchases tends to be the remit of the credit card providers - but with new EU rules on interchange fees coming into effect next month, many have slashed or even ended their reward schemes.
What's in it for me?
The effect, as far as TSB's customers go, is that they stand to be rewarded almost £140 a year after basic rate tax in interest and cash back; the cash back is tax free.
But that relies on people keeping an average of £2,000 in the account at all times, the maximum balance on which interest is payable.
There's more detail on the kind of interest customers are likely to earn in our guide to TSB's current accounts.
On top of that, however, are the potential returns available to Current Account Plus customers also willing to open one of the bank's Monthly Saver accounts.
This also offers 5% interest AER, and is guaranteed to be a fixed rate for the first 12 months the account is open.
Customers must commit to paying in at least £25, and up to £250, a month via standing order.
They can withdraw money from the account at any time if they need it - say, to avoid going into overdraft - but they can't replace it afterwards.
Working again on the principle that customers are saving the maximum amount every month, and aren't making any withdrawals, they stand to earn just over £81 before tax in interest, paid yearly.
All together, then, what TSB are calling their "555" offer could net customers almost £240 a year, pre-tax; basic rate tax payers could benefit by as much as £205.
But that's assuming a best case scenario.
When we have to pay them
As mentioned above, people who don't pay in a minimum of £500 a month don't qualify for interest that month; nor do people who go overdrawn.
TSB's standard current accounts offer a £10 buffer zone and £25 fee- and interest-free overdraft as standard. Going over the buffer - that is, being more than £10 in the red - will see customers forfeit interest for that month and incur a £6 fee.
Customers with smaller balances may not mind the loss of interest all that much, but even those getting the maximum cash back each month will lose out if they need to use more than the £10 buffer.
Going more than £25 into the red will incur interest of 1.53% per month, or 19.94% EAR - so anyone who knows they need a larger overdraft on a regular basis will quickly find themselves paying TSB, rather than the other way around.
And that's for planned overdrafts. People who haven't agreed an overdraft with the bank will be charged either £5 or £10 a day depending on how much overdrawn they are, plus interest at the same rate as above.
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