Tesco Bank Review - Accounts, Features, Fees & More

Thinking of switching banks? There are quite a lot of banks to choose from in the UK, including popular supermarkets with their own banking brands.

One option you’ll come across when searching for a new savings account, loan or credit card is Tesco Bank. But what does it have to offer, and is it the right choice for you?

Find out everything you need to know about accounts, cards, security and much more here in our full Tesco Bank review.

We’ll also show you an alternative, the Wise account. It’s fully digital, lets you manage your money in 40+ currencies and beats many banks when it comes to the cost of international transfers.

Learn more about Wise

But more on this later. For now, let’s get back to Tesco Bank.

What is Tesco Bank? An overview

Tesco Bank was launched in 1997, with a goal of helping Tesco shoppers to manage their everyday banking.

Owned by Tesco Plc, it has around 5.2 million customers¹, and offers a full range of accounts and financial products. This includes the following:

• Savings accounts - including ISAs, fixed rate and instant access savings.
• Travel money
• Loans
• Insurance - including car, home, travel and pet insurance.
• Credit cards
• Clubcard Pay+ - an account that lets you pay, pick up extra Clubcard points and round up your spending into a savings pot, when shopping in and out of Tesco. It comes with a debit card, which doubles up as a Tesco Clubcard.

Tesco Bank used to offer current accounts too, but closed these in 2021. At the time, it claimed that it made the decision because customers were no longer using their current accounts.²

How secure is Tesco Bank?

Tesco Personal Finance Plc is authorised by the Prudential Regulation Authority in the UK, and is regulated by both the Financial Conduct Authority (FCA) and the Prudential Regulation Authority.

It also offers up to £85,000 protection per person under the Financial Services Compensation Scheme (FSCS).

Tesco Bank offers a number of security measures to protect your account, including:

• Fraud prevention checks on new account applications
• Processes to identify and suspend suspicious transactions, along with alerts if you could be at risk of fraud
• The latest security technology used to protect both online banking and the Tesco Bank mobile banking app
• Strong Customer Authentication (SCA), including push notifications and one-time passcodes when accessing your account or paying for something online.

However, it’s also worth knowing that a report by consumer organisation Which? in 2021 found that Tesco Bank was one of the worst in the UK for online security. The organisation raised concerns with the FCA that Tesco Bank did not meet regulations on Strong Customer Authentication. ³ Although of course, it’s likely that the bank has made some improvements since then.

Everything you need to know about Tesco Bank savings accounts

Now that Tesco Bank no longer offers current accounts, its savings accounts have become one of its most popular products.

We’ll run through the different savings account types on offer below, including key features and interest rates.

Internet Saver⁴

This is an online savings account that gives you instant 24/7 access to your money. You can manage your account through online banking or the Tesco Bank mobile banking app. There’s a minimum deposit of £1 to open the account.

The interest rate for the Tesco Bank Internet Saver is:

• 4.50% Gross/AER (variable) for the first 12 months
• 1.25% Gross/AER (variable) after 12 months.

Instant Access Cash ISA⁴

You can save up to £20,000 tax-free in the Tesco Bank Instant Cash ISA, and make withdrawals whenever you need to. The minimum deposit is £1.

The interest rate is:

• 4.40% Gross/AER (variable) for the first 12 months
• 1.25% Gross/AER (variable) after 12 months.

The bank also has a Junior Cash ISA, which allows parents to save up to £9,000 a year tax-free for their child, who can withdraw it when they turn 18.

Fixed Rate Saver - 18 Months, 1 Year, 2 Year, 3 Year and 5 Year⁴

Tesco Bank offers fixed rate savings accounts covering a wide range of periods, so you can choose how long you’re happy to lock your money away for. It’s important to note that you can’t make withdrawals with these accounts until the fixed term has ended. Otherwise, you could incur a penalty.

Options include:

• 18 Months - 5.55% Gross/AER
• 1 Year - 5.65% Gross/AER
• 2 Year - 5.50% Gross/AER
• 3 Year - 5.30% Gross/AER
• 5 Year - 5% Gross/AER.

The minimum deposit with these accounts is £2,000, and you’ll need to deposit this amount within the first 30 days.

Fixed Rate Cash ISA - 1 Year⁴

Lastly, there’s the Tesco Bank Fixed Rate Cash ISA, which offers a fixed interest rate of 5.60% Gross/AER for 1 year. You can save up to £20,000 tax-free. The minimum deposit is £1.

Just remember that you won’t be able to withdraw your money during the one-year period without penalty.

Tesco Bank credit cards

Along with savings accounts, you might also be interested in Tesco Bank credit cards. Here’s a snapshot of the different cards on offer:⁵

How to open a Tesco Bank account

If you’re interested in any Tesco Bank products, whether it’s a savings account or credit card, you can apply for most of them online. Simply go to the Tesco Bank website, read the terms and conditions and click ‘Apply’.

You’ll need to provide your personal and financial details. You might also need to upload a scan or photograph of your photo ID, such as a passport or driving licence.

And for some products such as credit cards and loans, a credit check will need to be carried out.

The good news though is that like other providers, Tesco Bank has an eligibility checker tool. This lets you find out if you’re likely to be accepted for a particular credit card before applying, without affecting your credit score.

How long does it take to open a Tesco Bank account?

Interested in Tesco Bank savings accounts? It’s usually quite quick to open one. Once the bank has confirmed your identity, your new account could be open and ready to use straight away. However, it can sometimes take longer, especially if the bank needs further details from you or is struggling to verify your identity.⁶

Save with Wise when managing your money internationally

Shopping around for the best account for your needs? While you’re comparing banks and providers, make sure to check out the Wise account.

Wise is a money service business, offering a multi-currency account, international money transfer services and a debit card.

When you sign up online with Wise, there’s no initial or monthly fee to pay.

You’ll get a powerful account for managing your money in 40+ currencies, including making international payments for low fees and mid-market exchange rates. These rates are often much better than you’ll get when you use your bank for international transactions.

Open a Wise Account Today 🚀

You can even receive money for free in 8+ major currencies, as Wise gives you your own local account details.

For a one-time cost of just £7, you can get a Wise debit card which has no foreign transaction fees for spending abroad. You can withdraw up to £200 a month from overseas ATMs with no Wise fees.

Please see the Terms of Use for your region or visit Wise fees & pricing for the most up-to-date information on pricing and fees.

And there you have it - a full Tesco Bank review covering everything you need to know. We’ve looked at what products are on offer, including detailed info on savings accounts and credit cards. Plus, how to open an account or apply for a card with Tesco Bank.

So, you should be all set to check out Tesco Bank and make an informed decision on whether it’s the right option for you.

Sources used:

Sources last checked on date: 04-Sep-2023