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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.
But more on this later. For now, let’s get back to Tesco Bank.
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
- 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
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.
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.
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.
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.
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.
- 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.
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.
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
|Credit card||Interest rate||Balance transfer fees||Features|
|Balance Transfer Credit Card||- 0% on balance transfers for 22 months |
- 24.9% APR on purchases
|2.75% transfer fee||Earn Clubcard points when you spend|
|Low Fee Balance Transfer Card||- 0% on balance transfers for 15 months |
- 24.9% APR on purchases
|0.99% transfer fee||Earn Clubcard points when you spend|
|Low APR Credit Card||10.9% APR on purchases||-||Earn Clubcard points when you spend|
|Foundation Credit Card||29.9% APR on purchases||-||Earn Clubcard points when you spend|
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.
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
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.
You can even receive money for free in 9 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 £100 a month from overseas ATMs with no Wise 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.
- Tesco Bank - About Us - Key Facts
- BBC News - Tesco Bank to close all its current accounts
- Herald Scotland - TSB Tesco Bank and Starling: The best and worst of online account banking security ranked
- Tesco Bank - Savings
- Tesco Bank - Credit Cards
- Tesco Bank - Community - Does it take long to open my Internet Saver Account?
Sources last checked on date: 04-Sep-2023
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from Wise Payments Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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