Most Current Accounts Pay Little or No Interest on Your Money
Personal_Finance / UK Banking Aug 04, 2009 - 11:06 AM GMTBy: MoneyFacts
If you want to earn interest on your money, then don’t leave it in your current account.
Latest Moneyfacts.co.uk figures show that 83% of all non fee paying current accounts pay just 0.10% or less, with half (49%) of accounts paying no interest at all.
The average credit interest rate today stands at 0.71%, mostly thanks to Abbey and Alliance & Leicester which are paying 6.00% AER on their accounts, more than double the interest of their nearest rivals.
Michelle Slade, spokesperson at Moneyfacts.co.uk commented:
“A current account is many people’s most widely used product, yet so few will switch to get a better deal.
“Most people have their current account with one of the big five banks, but neither Barclays Bank or HSBC pay any credit interest at all.
“In the current economic climate, every penny counts and many customers are losing out on valuable interest.
“Providers have been quick to bring down the credit interest rate with the base rate, but have been reluctant to pass the benefit on through their overdraft rates.
“In the past when base rate increased, providers were quick to increase their overdraft rates, but they are never keen to reduce them. It is highly probable that when base rate increases again, overdraft rates will follow suit.
“People assume that it will take too much time and efforts to switch all their regular payments, but this isn’t the case as the bank will do it all for you.”
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