Different companies have always taken a different stance on who they give priority: the customers they already have that they don't want to lose, or the new customers they want to entice to join. This has started to become a big issue in the banking industry as well, with Lloyd's TSB the latest in a rising fashion to reject the old and concentrate on the new.
Lloyd's has launched a new current account which has a very tempting interest rate only available to new customers. Their Classic Plus account now benefits from an incredible 6.4% interest for new customers, leaving behind existing customers, who only get the previous 4.25%. Apparently, now is the ideal time for banks such as Lloyd's to appeal to new customers as switching bank is becoming more and more common. Indeed, according to the comparison firm Moneysupermarket, around 13,000 people switch their current account every day.
To qualify for this rate, you have to join the bank between now and 9th October and pay in at least £1000 every month. The interest rate only applies to the first £2500 in the account, after which the rate becomes comparatively unattractive at 0.1%. Though the account does not in the end appear to be as amazing as it looks on first glance, it is still a lucrative opportunity, as it means with an average balance of £2,500 you will be able to get a return of over £155. However, it is still worth nothing that though 6.4% is the highest rate on the market, it may still be better to stick with a bank that offers slightly less but indefinitely - such as Halifax's high-interest current account at 6.17%.
However good the new account from Lloyd's is though, one thing is certain - they are certainly shutting out the loyal customers, many of whom are frustrated by the new move. As Andrew Hagger, a spokesman for comparison firm Moneyfacts says: "This is another headline-grabbing current-account rate, but we can’t overlook the fact that existing customers have been neglected." Indeed, just as the new bank-switching figures mentioned above could work to Lloyd's favour, so could they also work against them by causing angry existing customers to switch elsewhere.
Ultimately, such new measures which shut out existing customers will, if increased, cause even more chaos in the industry, with customers transferring bank to get the better deals. It is always worth remembering with deals for new customers that, if you take up the offer, eventually you too will be "just" an existing customer. The cycle does go on but, however difficult it is to judge, what is most important is to try and stick with what is best for you both short and long term. Whilst some experts advise that you change often to get the best deals, some believe the hassle is just not worth it once you have comfortably settled down with a particular rate.
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