from what I understand Tesco bank had purchased bonds/securities/whatevs with a 5% interest rate, so made 2% off the deal. (and a slew of new customers worth x each to the bank)

Hopefully something similar is funding this

But the half baked eu ruling on merchant fees screwed savvy investors and the banks found another way to charge merchants.

They have limited account opening at various times though.

If both banks invest in whatevs (local currency) paying 5%, then they get 5%, pay you 3% and make 2%.

Are you trying to reference relative inflation?

Or something about the USD makes it difficult to invest?

It will be interesting to see if they

* maintain a 0.5% spread above the best nationally available rate as rates rise elsewhere as an ongoing customer-acquisition cost

* just stick to 3% even as other banks raise their rates higher over time, assuming that 3% is good enough and their product is sticky enough that people won't move

30 year US treasuries are now also above 3%, and we may see that continue with shorter-term instruments so there's a hedge there as well.

I haven't checked everywhere in the eurozone but a lot of major banks have online brands/products that are typically free. You should be able to have at least a checking account and a debit card without paying any fees. "Neobanks" are also a lot more developed than in the US: see N26, Revolut, Ferratum, ...

Savings accounts yield nothing, but that has nothing to do with retail banks :) That said, you can find fixed-term deposits between 1 and 2%: https://www.raisin.com/

The US 10-year is on the other hand is near 3%.

I'd love a checking account, with no fees that pays 3% on the whole balance.

My average balance on my current account is around £20k. My interest would be £600 a year at 3%, as opposed to £25 or so I get now.

Or look into an offset mortgage.

Even bog standard instant access accounts are above that, and have the added benefit of not potentially losing all your money when you debit card gets nicked.

I could open multiple, but then every month I'd need to spend time transfering money to each to earn the interest. Im not sure that would even count towards deposited every month, they might want to see a direct debit that is actually a salary. I'm not sure.

Further, I have an ISA (which is the UK tax free saving accont), that earns under 1% too and I'm limited to £20k a year into that account.

I have another account that pays ~2.x% per year, but on that one I'm limited to £250 a month.

Interest rates are abysmal right now in the UK.

This is a 30 second job setting up a free ongoing standing order, one to deposit then one to move the money elsewhere the day after every month automatically. This is sufficient to meet the pay-in requirements of all the banks.

> they might want to see a direct debit that is actually a salary

Salaries aren't paid by direct debit, that's something else - an agreement that allows a company to withdraw a variable amount from your account. Some banks have a requirement that you have x direct debits setup (normally 1 or 2), you can work around that with something like https://littledebits.co.uk/Direct-Debits-and-Charity

Cash ISAs serve minimal purpose with the new personal savings allowances. If you're a higher rate tax payer you get £500 tax free, £1000 if you're a lower rate cash payer. I'd question why you're holding so much cash if you're getting a return higher than that, there's often better places for your money.

Check https://www.bankaccountsavings.co.uk/

For what it's worth, here in Australia they have similar offers. At one bank, I said I wasn't interested because of the regular 'salary' deposit requirement, and that bank offered to set me up with two accounts and a regular automated transfer between them to meet the minimum monthly deposit requirement. Though honestly, the fact they offered to do that concerned me even more.

However, if you're looking for something slightly better than what you've got now there are currently a fair few 1.5%ish easy access accounts available that you could just dump your savings in and make a fair bit more than you're currently getting. You can get 2-3% if you're willing to lock some up for a year+.

ISAs are irrelevant for most people since the personal savings allowance came in - if you're earning less than £500/£1000 per year in interest (depending on income) then you won't pay tax anyway.

moneysavingexpert.com has excellent round ups of this sort of thing.