Lloyds Bank has issued a savings account update which could be bad news for customers. The bank, which has a net income of £4.4 billion, informed customers this morning of the change through a message in their app.
The message warned that “the interest rate on your savings account is going down”, leading to concern amongst some savers. The bank informed customers that it will be reducing the interest paid on accounts with more than £1 in them, from its previous rate of 1.1% AER. The new rate of 1.05% will take effect on July 23.
The news comes in a week when the company plans to close seven of its branches amid a flurry of high-street bank closures across the country.
The banking giant recently announced that it plans to close as many as 27 branches in May due to declining face-to-face transactions.
Lloyds Bank explained on their website: “Most customers are now using our mobile banking app, internet banking or calling us instead. This means they are using branches less.”
A decade ago, the banking titan had more than 2,200 physical locations but the forthcoming closures look set to leave just 756 Lloyds Banking Group branches operating across the nation, according to analysis by Money Week.
A pivot in banking operations is not unique to Lloyds, with other banking giants such as NatWest and Barclays doing the same as more people switch to mainly using online banking.
Santander has announced plans to close 95 branches nationwide, over a fifth of its total UK network, resulting in the loss of 750 jobs.
Among the sites closing this week are Sherborne, South Elmsall, Bridgnorth, Ludlow, Rayleigh, Bristol Clifton and Herne Bay.
MoneySavingExpert advises that Lloyds, Halifax and Bank of Scotland customers can use branches belonging to any of the three banks for their everyday needs, such as making cash deposits, withdrawals and paying in cheques.
You can also head to a nearby Post Office, where cash withdrawals and deposits are available, while some areas also have banking hubs, shared spaces where customers of a number of banks can get support and manage their accounts.
Lloyds Bank has been contacted for comment.
