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Product focus: Current accounts

Product focus: Current accounts

Category: Banking

Updated: 22/09/2011
First Published: 02/03/2011

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 It is now over 6 months old so the content may be out of date.

If you are regularly in your overdraft, then by opting for an account paying a competitive rate you can save money.

Alternatively, if you maintain a regular balance an account paying credit interest would be a better option. Most accounts tend to offer either a more competitive overdraft or credit interest deal, but there are some that accommodate both needs.

Below is a selection of competitive options:

Citibank – Citibank Access

  • Customers requiring an overdraft of £500 or less could consider the Citbank Access account as overdrafts up to this amount are interest and fee free.
  • Larger overdraft will be charged at a competitive 16.9% and will be subject to an arrangement and/or review fee of 0.50%, min £20.

Coventry Building Society - First

  • The First Account from Coventry Building Society offers a £250 interest and fee free overdraft.
  • Additional agreed borrowing is charged at £5 per month.
  • Based on the lowest high street bank overdraft rate of 15.9%, anyone requiring an overdraft of £400 or more would be better off with this Coventry account.
  • The account pays credit interest of 1.10% and customers are required to pay £1,000 per month into the account.

Halifax – Reward Current

  • Customers paying in £1,000 per month into the Reward Current account are paid interest of £5 per month.
  • Customers opening the account are charged no interest on overdrafts up to £2,500 for the first 120 days, after which a charge of £1 per day is applied on overdrafts up to £2,500 or £2 per day for larger overdraft.
  • If customers spend most of the month in their overdraft this system may work out more expensive.

Santander – Preferred Current Account

  • Customers transferring to the Santander Preferred Account paying in £1,000 per month will benefit from a market leading interest rate of 5.00% AER for the first year on balances up to £2,500.
  • After, the first year a rate of 1.00% AER is payable.
  • Transferred current accounts receive no interest charges for the first 12 month, after which 50p per day, maximum £5 per month is charged.
  • This is a good account for those looking for the best of both worlds

Lloyds TSB - Classic Plus

  • Lloyds TSB remains one of the few high street providers still paying credit interest.
  • Its Classic Plus Account pays 1.50% AER on balances up to £2,500, 0.10% thereafter.
  • Overdrafts are charged at 18.9% EAR and a £5 per month usage fee is payable.
  • The account requires monthly funding of £1,000 per month.
  • Customers with this account benefit from a 0.20% discount on new mortgage applications.

The Co-operative Bank - Current

  • The Current Account from The Co-operative Bank has the lowest interest agreed overdraft rate of the high street bank.
  • The account charges 15.9% EAR, subject to an £20 arrangement/review fee.
  • Unlike many of the other accounts on the market there is no minimum monthly funding requirement.
Compare current accounts

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.