Tesco's banking division has released a prepaid debit card with an associated savings account. The card is available to the retailer's 20 million Clubcard holders.

Tesco claimed the new option, dubbed Tesco Clubcard Pay+, is intended to assist customers in budgeting and saving. The debit card can be topped up with funds from any UK bank account.

Clubcard Pay+ is not intended to replace your primary bank account and should not be mistaken with a fully functional current account. It does not offer an overdraft, direct debits are not possible, and there are fees to consider.

Customers receive a payment account with a debit card that may be used everywhere Visa is accepted, as well as the Round-Up savings account.

Shoppers can fund their Clubcard Pay+ account – which enables them to ringfence their grocery spending if desired – by connecting it to any UK bank account using the Tesco Bank app.

Additionally, customers can "save while they buy" by rounding up their purchases to the closest pound and depositing the difference in the Round-Up account.

This account offers a variable 0.25 percent interest rate and may be managed through the app. Your Round-Up balance can be withdrawn at any moment.

Several other UK banks, including Lloyds, Halifax, and the new digital player Chase, provide similar facilities that enable customers to convert their loose change into savings. Interest rates on these accounts vary considerably: certain qualified Lloyds Bank accounts pay as little as 0.01 percent, while Chase is now offering 5%.

The unveiling of this new payment method came just weeks after Tesco Bank announced the closure of all current accounts.

Pay+ was initially available to a limited number of consumers in March and is now available to all Clubcard members aged 18 or over who live in the United Kingdom.

The debit card serves as a substitute for your Clubcard.

As a bonus, consumers get one additional Clubcard point for every £1 spent in Tesco using Clubcard Pay+ within the first 100 days after their account is opened.

Along with the points earned in-store, you earn one Clubcard point for every £8 spent outside of Tesco (some exclusions).

Clubcard Pay+ does not support several transactions, including direct debits and standing orders.

Additionally, keep in mind that if your account balance falls below zero – for example, if a merchant takes a payment without verifying that you have sufficient funds in your account - you will need to replenish it quickly. Tesco Bank states that if you do not comply, "we may take action to suspend and eventually shut your Clubcard Pay+ and Round-Up accounts." On the other hand, the bank will not charge you for refusing or permitting payments due to a lack of cash.

At the time, the bank does not offer joint accounts or add additional account holders, although this may change in the future.

This is not an ideal card to use abroad: all Clubcard Pay+ debit card transactions done outside the UK are subject to a 2.75 percent foreign exchange tax. If you withdraw cash from an international ATM in a foreign currency (other than the euro), you will be charged an additional 1% cash withdrawal fee.

The official Financial Services Compensation Scheme ensures money held in the accounts up to a total of £85,000 in value.

This move reflects an expansion of Tesco Bank's financial services goals, following the closure of all current accounts last November, seven years after entering the market.

According to MoneySavingExpert.com, while Clubcard Pay+ may be an easy way to earn some extra points in the short term, "in the long run, it's possible to earn significantly more points or cashback using a rewards credit card, provided you use it exclusively for everyday purchases and pay it off in full each month."