Banking news
Current accounts go pop
4 May, 2007
Since last October current accounts have been seriously lacking, with interest rates only increasing by 0.29 per cent, despite the recent base rate hikes
Disregarding next Thursday’s almost certain increase of at least 0.25 per cent, the Bank of England base rate has increased by 0.5 per cent since November 2006, yet this has barely been reflected in standard current account interest rates.
Now under fierce pressure from the Office of Fair Trading (OFT), the meagre interest rates on current accounts have been picked up by MoneyExpert.com, who state that the average rate has only increased from 1.55 per cent in October 2006 to the 1.84 per cent of today.
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Startlingly enough, this figure actually includes high-profile launches such as Alliance & Leicester’s Premier 21 account paying 10 per cent for customers aged 16-21, and a range of offers from firms such as Halifax and Bank of Scotland paying rates of around six per cent.
Marginally worse than the 45 of Octover 2006, there are currently still around 47 accounts out of a total of 105 which are paying one per cent or less for customers in credit on their current account.
Sean Gardner, chief executive of MoneyExpert.com, advised consumers: “Current accounts are the major personal finance issue in the UK at the moment with customers rebelling over fees and the OFT launching an investigation. However despite all of that, the average rate paid for customers who keep cash in their accounts has barely budged in the face of Bank of England pushing up interest rates.
“Our own switching index shows around 12,700 people are switching current accounts every day. That figure is certain to keep climbing as more and more people realise there are better deals available. And there genuinely are some excellent bank accounts out there.”
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