You are here: Home - Saving & Banking - News -

Current account rates rising

0
Written by:
16/06/2008

The average in-credit interest rate on a current account is rising, but too many consumers are still receiving “pitiable rates”, according to Money Expert.

Research carried out by the financial comparison site showed the average credit interest rate (that is, the rate received when the account holder is ‘in the black’)has risen to nearly 2.% from 1.6% a year ago. The proportion of current accounts charging less than 1% on positive balances is falling, this is now 45% compared to 56% a year ago.

However, this still isn’t good enough, according to Money Expert and banks should be doing more to reward customers who stay in credit. Sean Gardner, director of MoneyExpert, said: “It’s encouraging to see banks getting their houses in order and offering better interest rates for customers with positive balances.

“But let’s be honest – almost half of all accounts reward customers who are in the black with less than one% annual interest. That’s an appalling return. Given there are accounts out there offering ten times that amount of interest, customers should not settle for a raw deal.”

Money Expert found only 15 current accounts from six banks offer credit interest of above 5%. However most high street banks charge just 0.1% interest on at least one of their standard current accounts. Gardner added: “3.57% is a healthy average for accounts paying above 1%, so every customer should aim to find an account with a similar or higher rate of interest.

“This is of course not forgetting the importance of customer service and other perks – we wouldn’t necessarily recommend applying purely on price as it’s not just the account but the bank that you’re buying into. You need to be sure it’s the right place for your money.”

Tagged:

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
Savers in seventh heaven with fixed rates

The fixed-rate bond market is booming, with competition hotting up between providers and rates topping 7%.

Close