Lloyds TSB has announced that it is to begin paying interest on cheques from the moment they are banked instead of waiting at least three days to clear.
The changes to the bank’s current account will mean that it is the first of its kind in the UK, and will also allow instant access to money paid in.
The rules will apply up to a limit of £1,000. They will also ensure that people who have slipped into the red will see their overdraft reduced immediately, charging them less interest.
“Customers feel cheated when they pay in a cheque and don’t earn interest straight away. From today, our customers stand to earn over 150 days’ more interest,” said Lloyds TSB director Terri Dial.
The moves mean that Lloyds will be offering one of the best current account deals for people who need regular access to money or who occasionally risk going overdrawn.
A poll by the bank showed enthusiasm for the idea, with 90 per cent of respondents saying that they are angered at having to having to wait to earn interest on cheques.
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