Tesco Bank closes ALL checking accounts: Supermarket giant has 213,000 customers – here are four banks they can switch to
- Tesco Bank closes its current account business
- Very few of its customers use it as their primary account
- Where can you transfer? We reveal the top four accounts currently available
Tesco Bank will close its current account from November, as another supermarket pulls out of the market.
The supermarket giant’s banking division says it has 213,000 customers with a checking account, but only 12 percent use it as their primary account.
That means nearly nine out of ten accounts have limited activity or are used for other purposes, such as a piggy bank.
As a result, some 26,000 customers are looking for a new primary current account.
Axed: The supermarket giant is leaving the checking account market
The options are to switch with the seven-day service or transfer money to a Tesco Bank savings account.
It also says that hit can register for Tesco Clubcard Pay, a new product currently being tested with a panel of shoppers and colleagues.
Meanwhile, those with overdrafts can be induced to use one of the credit cards to clear the balance.
The current account was closed to new applicants in December 2019, suggesting the writing was on the wall for nearly two years.
They can be expensive for banks to run, especially if customers don’t actively use them and sell other products at the same time.
Tesco Bank says customers will receive letters with the options in the next two weeks.
Earlier this year, M&S Bank took a similar step to clean up current accounts as it appears that supermarket challengers have failed to attract enough customers.
Customers who choose not to switch to a new checking account have been warned that they must transfer all regular incoming or outgoing payments to another account and ensure that their account has a balance of €0 by Tuesday, November 30, 2021.
The bank as a whole has more than 5 million customers across a range of banking and insurance products.
It says the closure supports its strategy to focus on products and services that best meet shoppers’ needs.
Gerry Mallon, chief executive of Tesco Bank, said: “With so few of our current Account customers using it as their primary account, we want to support them in finding a suitable alternative depending on their circumstances.
“We will pay particular attention to supporting vulnerable customers and those in need of financial assistance.
‘Customers who have used our Payment account as a piggy bank might be a better fit with one of our customized savings products.
“And buyers looking for a payment option that allows them to continue collecting Clubcard points in and out of Tesco should consider Tesco Clubcard Pay or a Tesco Bank credit card.”
Clubcard Pay, it says, is an account that comes with a debit card and is designed to help shoppers pay, save and collect Clubcard points.
It adds that it will enable shoppers to upload and reserve their shopping from any UK checking account into their Clubcard Pay account via the Tesco Bank mobile banking app.
Customers collect Clubcard points on the majority of their purchases, both inside and outside Tesco.
It comes with a rounded savings account, which allows customers to build a piggy bank by rounding up their spending to the nearest £1.
Figures from the Payment Account Switching Service show that more than 7 million people have changed bank accounts since 2013.
But if that’s cause for celebration, it’s just 1 million more people than the number who switched energy suppliers in 2020 alone.
Indeed, the people who regularly switch bank accounts are a rarity and are usually the ones who are happy to spend a few hours buried in paperwork in exchange for a money exchange bonus or other benefits.
But despite that paperwork, switching is easy, with CASS promising to convert your account and any direct debits within seven days.
Here are our top accounts – you can read more about them here: Looking for a better bank? This is Money’s pick of the four best current accounts for interest, perks, packages and overdrafts
1. Best Account for In-Credit Interest: rural
2. Best Cash Account: HSBC
3. Best Account For Interest On A Large Balance: Lloyd’s
4. Best ‘New Boy on the Block’: Starling Bank