Lloyds TSB has raised the stakes in the high street banking war with a move to pay interest on cheques to customers as soon as they are paid in, but rival banks have criticized the move.
The UK bank will pay interest to current account holders on the day cheques are deposited and allow customers instant access to the cash up to GBP1,000. Usually customers have to wait until cheques are cleared which takes around three days.
However, Barclays has now responded with a statement criticizing the initiative. Paying interest on day one on a Lloyds current account is not only late in the day but does not provide the average customer with any worthwhile financial return, the bank said.
Barclays added that it has been offering instant access to funds via a cheque up to GBP1,000 for eight years.