Tesco Bank has announced that it will keep the 3% interest rate on its current account until April 1 2019.
The account was launched in 2014 with the 3% offer on balances up to £3,000, but this is the first time the supermarket bank has pledged not to reduce rates.
It comes at a time when most other bank offers are being drastically scaled back.
The return on the Santander 123 current account was halved from 3% to 1.5% in November 2016, while TSB’s Classic Plus account went from paying 5% on balances up to £2,000 to 3% on balances up to £1,500 in January.
Lloyds Bank followed suit soon after, ditching the tiered rates of up to 4% on balances between £4,000 and £5,000 on the Club Lloyds account and replacing them with a flat rate of 2% on balances from £1 up to £5,000.
So is Tesco Bank worth switching to, or should you consider one of its rivals instead?
What the Tesco Bank current account offers
The Tesco Bank current account is a decent option for savers.
The 3% variable interest on balances up to £3,000 will allow you to earn up to £90 a year in a single account or £180 if you open a single and joint account and spread £6,000 between the two.
The rate while being variable is now guaranteed not to fall for two years, which means the account is like a two-year fixed rate bond but better.
The Tesco Bank current account beats the top rate on a two-year fixed-rate bond by a long way (the best rate pays just 1.6% currently) and allows you to have easy access to your cash.
The account also offers Clubcard points on spending. You’ll get one Clubcard point per £1 spent at Tesco or one Clubcard point for every £8 spent elsewhere.
But from 1 April 2017 Tesco is quadrupling the points you can rack up in-store meaning shoppers can pick up one point for every £1 spent.
What’s really appealing about this account is that it’s one of the easier ones to get and use as a savings account.
Unlike other top deals, it doesn’t force you to pay in a minimum amount each month or set up lots of direct debits to receive the benefits, and the account is fee-free.
How does Tesco Bank compare on interest?
The Tesco Bank current account can be beaten if you’re chasing the best rates.
The Nationwide FlexDirect account offers a market leading 5% interest for 12 months on balances up to £2,500.
This means in one year you could earn £125 or £250 if you were to open a single and joint account and spread £5,000 between the two.
However, the rate is only guaranteed for one year and will fall to just 1% after this time.
Elsewhere, the Bank of Scotland Classic Account with Vantage pays an equally good 3% variable interest but on balances from £3,000 up to £5,000.
This means the account could return £150 or £300 if you were to open both a sole and joint account and spread £10,000 between the two.
However, the rate is not guaranteed so could be cut at any time.
If you have a bigger pot, the Santander 123 account is still the best as you can earn 1.5% on balances up to £20,000.
That means you can pocket £300 (£240 after you factor in the monthly £5 fee) in one year, or £600 (£540 after the fee) if you have £40,000 to spread between a single and joint account.
That said, the rate on the 123 current account is also variable so could be cut further.
Is Tesco Bank safe?
Tesco Bank was hit by a cyber-attack in November last year. Hackers managed to steal £2.5 million from accounts, which the bank has since refunded.
Tesco Bank’s chief executive Benny Higgins denied the move to guarantee rates was an attempt to lure customers following its security breach.
He said: ‘This is something we have been planning on doing for a long time. When we spoke to customers, there was anxiety over the threat of repeated cuts to rates.
"We have removed the burden of uncertainty for customers by guaranteeing we will not change the rate for the next couple of years."
Higgins offered reassurance for new and existing customers, adding: ‘We have spent a lot of time focusing on making sure we have got the best preventative detection we can in place.'