Lloyds TSB is the latest bank to launch a current account with a tempting rate that excludes loyal customers.

In the latest attempt to capital-ise on the lucrative switching market, the bank has put up the rate on its Classic Plus account to 6.4 per cent for new customers, compared with the 4.25 per cent that existing customers earn.

About 13,000 people switch current accounts every day, according to the comparison firm Moneysupermarket.

To qualify for the new rate, you have to to open a Lloyds account before October 9 and pay in at least £1,000 a month. The rate applies only on balances below £2,500. Any money above this will earn 64 times less at a paltry rate of 0.1 per cent. And the 6.4 per cent rate is only available for 12 months after you sign up, after which it reverts to 4.25 per cent.

This makes it less competitive than some of its rivals over two or three years, though you should really switch after the first year.

If you had an average balance of £2,500 with Lloyds, you would earn £155.50 interest in the first year but £150, for example, with Halifax’s high-interest current account, which pays 6.17 per cent indefinitely.

By year two, you would have made £261.75 with Lloyds but £300 with Halifax. By the third year, your total interest earned would be £368 with Lloyds and £450 with Halifax.

Andrew Hagger at the comparison firm Moneyfacts said: “This is another headline-grabbing cur-rent-account rate, but we can’t overlook the fact that existing customers have been neglected.”

Out of Lloyds TSB’s five accounts – Classic, Select, Gold, Platinum and Premier – only Classic is fee-free.

When opening an account, you have to request that it is converted to a Plus account to benefit from the higher rate. There is no extra cost on the Plus accounts, but customers who do not ask to switch will be left languishing with a lower interest rate of 0.1 per cent.

In July, Abbey launched an account offering 8 per cent to new customers who pay in at least £1,000 a month. Although this makes it a market leader, the rate is only available on a balance of up to £2,500, after which it reverts to a much lower 2.5 per cent.

Like the Lloyds deal, the high rate is also available for only a year, after which it drops to 2.5 per cent. It means you would still be better off with the Halifax account over three years.

Another good alternative is the Alliance and Leicester (A&L) Premier Direct account which pays 6.5 per cent.

If you had a balance of £2,500 over 12 months, you would get £157.75 with A&L – £2.25 more than with the Lloyds account.

The A&L account, though, has a low overdraft rate of 5.9 per cent for both authorised and unauthorised borrowing – on top of a 12-month 0 per cent rate on agreed overdrafts. In contrast the Lloyds TSB authorised overdraft rate is 18.9 per cent and its unauthorised rate is 28.9 per cent. The bank’s penalty fees on current accounts are also high. It charges £35 if a direct debit is refused, although, unlike some banks, it does cap the number of penalty fees that can be levied. Only three charges can be applied in one day.

If you have a high balance consider a Coventry building society account which offers 6.17 per cent for balances up to £500,000.

BETTER OFF BY SWITCHING

Joel Cohen, 28, a management consultant from London, replaced his HSBC current account with an Alliance & Leicester Premier Direct account six months ago.

He says he wanted a better rate on his money but also wanted to enjoy the benefit of lower overdraft charges.

‘Now that I’ve switched, not only am I not charged if I go overdrawn, I also seem to be making around £5 a month from the higher interest rates,’ he said.