Kevin Mountford, Thursday July 24, 2008
Banking giant Alliance & Leicester is looking to win new business with a £100 offer to anyone who signs up to its Premier current account - but could you get more for your money elsewhere? We take a look around
Alliance & Leicester (A&L), which is the subject of a £1.26 billion takeover bid from Santander, the Spanish bank that owns Abbey, is renewing its effort to increase its share of the current account market, by offering anyone who signs up to its Premier account, £100.
Its Premier Direct account offers the best deal for most people on balances in credit (8.5% for the first year). However, if you would prefer an account that offers branch access, Abbey’s Preferred In-Credit current account isn’t far behind which pays 8% on balances up to £2,500.
As with the A&L Premier Direct deal, this is a preferential rate that applies to the first year only – after 12 months the account pays 2.5%. This is also the rate you receive on balances above £2,500 making it a more attractive option for high earners (A&L pays just 0.1% on anything above £2,500).
Abbey and A&L are ahead of competition, but they’re not alone. The Coventry Building Society Coventry First deal pays 5.6% but this does include a 0.85% bonus for the first 12 months and you must deposit at least £1,000 a month into the account. However, if you are a high earner its well worth considering because the high rate applies to balances up to £250,000.
Time to switch
Nearly 60% of people admit to never having switched their current account provider according to research from A&L, and the Office of Fair Trading (OFT) effectively accused banks of taking advantage of this inertia.
In a new report the OFT concluded that the £8billion a year personal current account market is not working well for consumers – it said the complexity and lack of transparency in the market makes it extremely difficult for individuals to compare their bank account with other offerings and that in turn, there is little incentive for customers to switch provider.
Like, if your current bank pays you a paltry rate of interest when you are in credit, or charges high interest when you are overdrawn, there is no excuse for you not to switch.
So don’t sit on it, get canny, and you could do no better than starting with ditching your unsatisfactory current account.
