Is the new Abbey current account for you?
July 10, 2007
With all the controversy over banks failing to pass on interest rate hikes to customers in terms of current and savings accounts, many customers have been shopping around to find accounts that pay a more competitive interest rate than their current bank.
Also, many may have been tempted by a new current account made available through Abbey, which offers a generous 6.4 percent interest after tax. However, industry professionals are warning customers to look more closely at the account before making a decision.
The 6.4 percent interest rate will only be paid for the first year, after which the rate will nosedive to just 2 percent. Only new accounts will be offered the 6.4 percent, so existing Abbey current account holders will not be eligible.
In addition to this, accountholders must pay at least £1000 into the account, and the interest rate is paid only on balances up to £2500. Experts are advising customers that do decide to opt for this account to consider switching to another account at the end of the first year once the 6.4 percent period expires.
One MoneyExpert official stated: ‘If you do take advantage of the headline rate, our advice would be to switch again at the end of the year unless you find other reasons to stay.’
There are a number of banks and building societies that offer competitive rates on current and savings accounts even after the first year, and customers are advised to compare both the interest rates offered and additional benefits in order to find the right account for their every day transactions as well as for their savings.
A spokesman from Abbey stated that many of the customers with some of the leading banks in the UK are getting a raw deal, and that there is nothing for them to stay with their current provider.
Alan Wright
10th July 2007
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