Current accounts - switch and earn an extra £125! - Money - News - Moneyfacts

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Current accounts - switch and earn an extra £125!

Current accounts - switch and earn an extra £125!

Category: Money

Updated: 04/12/2009
First Published: 13/09/2007

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

the current account war shows little sign of easing, with several banks battling it out to offer customers the best current account rates and deals. Moneyfacts experts have practised what they preach and earned an extra £125 in interest simply by switching their current account.

If you're not getting the best rates or customer service on your current account, then vote with your feet - switch and earn more money like we did!

Alliance & Leicester used to hold top spot for the best current account credit and debit interest rates. However, Halifax, Abbey and Coventry Building Society are now battling it out to be top dog when it comes to paying the highest rates of interest on current accounts.

Alliance & Leicester have hit back with its Premier Direct Current account, offering an extra 0.37% interest and increasing its recommend a friend incentive to £50 from £25!

There really has never been a better time to switch current account especially with some current account interest rates now exceeding even the best savings rates. Banks and building societies use current accounts as a gateway to cross-selling you additional financial products, some of which may not be quite as competitive as the current account!

When opening the A&L Premier Direct Current Account for example, a savings account is opened automatically as part of the process to get you saving with them from day one. But, don't forget to shop around for the best home for your savings as any extra money earned on their current account could be easily lost if you could get a better rate for your savings elsewhere.

When you decide to switch current account it's vital that you do your homework and make the right choice. Ask yourself a few basic questions to get the right current account for you e.g.

  • Are you someone always in credit, or do you rely on an overdraft?
  • Do you prefer to use a branch, Internet or telephone?

Here are the best current accounts for credit balances.

Company

Account

Gross

Interest notes

Funding required

Alliance & Leicester

Premier Direct Current<

6.31%

0.10% paid on balances over £2.5K

£500 per month

Abbey

The Abbey Current (Cr opt)

6.13%*

2.47% paid on balances over £1K

(6.13%* rate only payable on transferred accs)

£1K per month

Halifax

High Interest Current Account

6.00%

0.10% paid on balances over £2.5K

£1K per month

Coventry BS

First

5.70%*

On balances up to £250,000

£1K per month

Nationwide BS

FlexAccount

4.25%

0.25% paid on balances over £3K

£1K per month<

Lloyds TSB

Classic Plus

4.17%

0.10% paid on balances over £5K

£1K per month

Moneyfacts.co.uk - the money search engine

* = Introductory variable rate for limited period.

Here are the best current accounts for debit balances

Company

Account

Authorised
EAR

Unauthorised
EAR

>Notes

Alliance & Leicester

Premier Direct Current

0.0%

5.9%

£500 pm funding required. Internet banking needed. 0% overdraft for 12 months on balances up to £2.5K, then 5.9% EAR

Halifax

Moneyback

6.9%

28.8%

£1K pm funding required

Transferred accounts get 0% overdraft for 120 days on balances up to £2.5k

Nationwide BS

FlexAccount

7.75%

24.9%

Yorkshire Bank

Current Account Plus

9.1%

31.37%

Offset / pooling facility available

Intelligent Finance

Current Account

10.05%

25.25%

Offset / pooling facility available

Abbey Current Account (Db Opt)

10.9%

28.7%

£1K pm funding required. Transferred accounts charged at 0% for 4 months.

Moneyfacts.co.uk - the money search engine

the process to switch current account is relatively simple, and in most cases you can either leave your new bank to switch your current account for you or you can control the process yourself. Whichever method you choose you need to keep close tabs on both your old current account and new current account whilst the transfer is in progress. Halifax, Abbey and Alliance & Leicester all offer interest free overdrafts to help protect against any timing discrepancies during the current account switch.

the rewards for switching current account are worth it. For a customer with an average credit balance of £2,000, switching from a current account paying 0.10% to a current account offering 6.31%, could earn you almost £125 extra interest in a year.

,

You too could follow in the footsteps of the Moneyfacts experts, who say 'it pays to switch current account'.....

Andrew Hagger, Head of News & Press at Moneyfacts says, "I recently switched my current account to the Halifax and after a couple of initial hiccups with the switching service, my current account has been successfully been transferred and I'm now getting 60 times more credit on my current account - wish I'd done it years ago"

Lisa Taylor, Press Officer at Moneyfacts adds, "My new year's resolution this year was to practice what I preach and get the best possible deal for my financial products. I chose to switch to the Alliance & Leicester Premier Direct Current Account, transferring my direct debits and standing orders myself. While it does take a bit of work and a careful eye, it is certainly worth it. I have immediately seen the benefits of a higher interest rate on my current account and I'm no longer giving my money away!"

What to do next:

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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