TSB to slash rates on Classic Plus account from next year

Hayley Kirton
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TSB bank branch
The bank is the latest to opt to cut rates on its high interest products (Source: Getty)

TSB has confirmed it is cutting the interest rate on one of its top accounts.

From 4 January next year, the challenger's Classic Plus account will offer a three per cent rate on balances up to £1,500, which is less generous compared with the five per cent rate on balances up to £2,000 currently offered.

In addition, the rate on TSB's Enhance Current Accounts, which have been closed to new customers since March 2014, will be cut from 0.75 per cent to 0.25 per cent on balances up to £5,000.

TSB has said it will be writing to all affected customers and will be giving them at least two months notice.

"We pride ourselves on giving our customers the best service and support possible and our partners are on hand to help guide customers through these changes," the bank said in a statement.

Read more: MP blasts banks as they come clean on overdraft fees

TSB's decision is the latest in a string of rate cuts on popular high interest accounts.

Just yesterday, it was announced that Lloyds would be knocking its top interest rate available on Club Lloyds down from four per cent to two per cent from January.

In August, Santander revealed it would be cutting the rate on its popular 1,2,3 account to 1.5 per cent from the start of November.

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