TSB offers £200 to switch current account while Kroo ups in-credit interest to 3.03%

Switching your current account to a different bank may now be even more lucrative, as two more providers have announced incentives for those that join them. 

From tomorrow, anyone switching to a TSB current account can receive up to £200 in the first year.

Meanwhile, a new digital bank, Kroo, is looking to pull in customers by offering what is arguably now the best in-credit interest rate on the market.

The past few months have seen several banks launch generous deals for those willing to swap current account.

Last week Santander began offering a £200 cash incentive, matching a £200 offer from Lloyds and bettering a £175 offer from First Direct.

What is TSB offering?

From tomorrow, customers who switch to TSB’s free Spend & Save or £3 a month Spend & Save Plus current account will receive £200, paid in two installments.

Switchers will get £125 cashback if they apply by 3 March, and switch to TSB using the Current Account Switch Service by 24 March.

They will need to set up at least two direct debits, use their debit card at least once and log into internet banking or the TSB mobile banking app to get the first instalment paid into their account by 21 April.

A further £75 will be paid into their account by 31 October if they keep their account open, pay in at least £500 each month, make five debit card payments and maintain two direct debits.

Those who switch to TSB’s Spend & Save account can earn £5 a month cashback for the first six months as long as they make 20 payments or more on their debit card each calendar month.

TSB’s Spend & Save Plus account also offers £5 a month cashback but without the six month time restriction. It also imposes no charges when using a debit card abroad.

However, its advantages are countered by the £3 monthly fee for maintaining the account.

On top of the switching and cashback offers, both TSB’s current accounts come with linked instant access savings accounts paying 2.52 per cent interest.

TSB allows customers to put money aside in up to five individual Savings Pots, each with maximum balance of £5,000 per Pot – so £25,000 overall.

Someone stashing £10,000 away could therefore earn £252 in interest over the course of a year. 

Although this fall short of the best rates on the market, it is among the best rates on offer among other big high street names. 

>> Check out the best easy-access savings rates here

What is Kroo is offering?

The digital challenger bank, Kroo, is increasing its current account interest rates to 3.03 per cent on balances up to £85,000 from 1 February.

The rate change will arguably make it the best UK bank account for in-credit interest. 

Nationwide offers 5 per cent interest to new joiners in the first year – but only on balances up to £1,500.

Someone keeping a balance of £10,000 in their Kroo current account could expect to earn £303 over the course of a year, if the interest rate remains the same.

Cash held with the bank is fully protected by the UK’s deposit guarantee scheme (the FSCS) meaning customer deposits are protected up to £85,000 per person.

In addition to the top-tier interest rate, Kroo’s current account allows customers to share, track and split bills.

It also offers zero fees on spending when using its debit card abroad and a lower overdraft APR than most high street banks.

This is Money profiled the bank when it launched last year, including comparing it to rivals Monzo and Starling.  

Those wishing to take advantage of the Kroo deal, won’t need to use the current account switching service to do so.

It could simply be used as a secondary bank account, as there are no fees or requirements for setting up an account – unlike with TSB. 

However to set up an account, switchers will need to download the mobile app and run through a quick five to 10 minute sign-up process. 

Andrea De Gottardo, chief executive of Kroo said: ‘We want to change the way banking is done and move away from the profit extraction model of old.

‘Interest of 3.03 per cent allows customers to grow their balance like a savings account without the hassle of moving money from an e-saver account.

‘Our current account lets you do your banking in one place with no catches and gimmicks.’

Kroo was granted a full UK banking licence earlier this year, only the third bank to receive one since 2016.

Last year, Kroo was awarded the Best Newcomer 2021 Award by the British Bank Awards and the Banking Innovation Newcomer Award 2021 by the Finder Awards.