Savings Interest Rates, Switch Offers and Guides for Tesco Bank

Who they are

Tesco Bank was established in 1997 as a joint venture between Tesco and Royal Bank of Scotland. In 2008, Tesco bought out RBS's 50% stake for £950 million, and the business was renamed Tesco Bank in October 2009. It spent years building out a full retail banking range before gradually stepping back - selling its mortgage portfolio to Lloyds in 2019, stopping current accounts for new customers in 2020, and closing all existing current accounts in 2021.

The big change for savers to know about: on 1 November 2024, Tesco Bank's banking business transferred to Barclays Bank UK PLC, which now manages all savings accounts and products. Barclays continues to use the Tesco Bank brand through a partnership agreement with Tesco, so the name and products stay familiar - but the underlying licence has changed.

FSCS protection - a key detail

Because Tesco Bank is now a trading name of Barclays Bank UK PLC, if you have savings with both Tesco Bank and Barclays, they come under the same banking licence and share FSCS protection. That means if you have over £85,000 saved with both combined, you will only benefit from a single £85,000 FSCS limit across the two - so you should consider moving some money elsewhere if that applies to you. The DepositScout data does show a higher FSCS figure for these accounts - always check the current terms on your account, as protection limits can vary by product.

Savings accounts

Tesco Bank keeps its savings range straightforward. On the easy access side, the Internet Saver currently pays 4.21% AER - though it is worth knowing this includes a bonus rate of 3.16% that applies for the first 12 months only, sitting on top of a base rate of 1.05%. Once the bonus period ends, the rate drops significantly, so it is worth diarising a review date.

The Instant Access Cash ISA works similarly, paying 4.06% AER via a 3.01% fixed bonus combined with the 1.05% standard variable rate. After 12 months, only the base rate remains - so the same watch-and-switch discipline applies.

For those happy to lock money away, Tesco Bank's fixed-rate range is broad. Fixed Rate Savers are available across terms from 1 year all the way up to 5 years, all currently sitting at 4.40% AER, with a minimum deposit of £2,000. The Fixed Rate Cash ISA also offers 4.40% AER with no minimum balance, which makes it accessible for smaller ISA pots. None of the fixed accounts allow access before maturity, so only commit what you genuinely will not need.

Is it right for you?

Tesco Bank suits savers who want a familiar name, a simple range, and competitive headline rates - particularly on fixed-term products. The Clubcard connection is less relevant here than it is on Tesco credit cards; savings are purely rate-driven.

The two things to keep front of mind are the bonus rate structure on the easy access accounts, and the shared FSCS licence with Barclays. If you already hold a significant sum with Barclays, check your combined total before opening a Tesco Bank account.

Rates change over time - use the live figures shown on this page to make sure you are comparing the most up-to-date numbers before you decide.