Banks try and tempt back customers with higher rates
October 7, 2008
Many of the major banks in the UK are trying to tempt back business from customers by increasing the interest rates that are offered on their current accounts. Whilst the judge that was presiding in the recent bank charge High Court test case deliberates over his ruling, which is eagerly awaited by campaigners and consumers who have slated these charges, the bank have decided to wage a current account interest rate war in a bid to increase custom.
However, whilst the promise of higher interest rates paid on credit balances may be tempting for consumers that want to earn a higher return on their money, experts are urgings customers to check the small print before rushing to switch to an account that offers what looks to be a headline grabbing rate of interest. This is because there may be a catch, and this means that it may not be worth the consumer’s while to actually switch to that account.
For example, a couple of major banks, HSBC and the Alliance and Leicester have advertised impressive interest rates on their current accounts, but in the small print customers will see that the high rate of interest only applied to a certain amount of money, whilst the remainder of any credit balance earns only a minimal level of interest.
Customers are also being urged to remember that the outcome of the High Court test case could affect how worthy an account is, as many banks may bring additional charges into force in the event that the judge rules in favour of the Office of Fair Trading in the case, which would mean lost profits for banks.
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