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

Current account holders warned over headline rate

0
Written by:
11/03/2008

Consumers may not necessarily get the headline interest rate on their current account, according to Coventry Building Society.

Current accounts advertising high interest rates often only pay this rate up to a certain limit, after which consumers could earn considerably less interest. Research from Coventry found that banks such as Alliance & Leicester, Abbey, Halifax, Nationwide and Lloyds TSB, all offer their headline rates up to limits of £2,500 with Nationwide offering a limit of £3,000.

In the case of all but Abbey, however, customers who exceed the limit only earn 0.10% interest on their savings, according to Coventry. This results in customers earning an average rate of far less than the headline rate, with customers of Alliance & Leicester’s Premier Direct account earning an average of 3.92% interest per year, as opposed to the 8.50% headline rate.

Rachel Haworth, head of marketing at the Coventry, said: “A customer switching to a top-rated account, and keeping a steady balance of £2,500 deposited throughout the year, will indeed earn a good rate of interest.

“However, this is not how many people operate current accounts. Customers who have their salaries paid into their current account will have a significant balance at the start of the month (even more so in the case of joint accounts) and therefore find a sizeable proportion of their money earning almost no interest at all.”

Related Posts

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

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

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.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

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...

YourMoney.com Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
Conservative credit card attack “missed the point”

Shadow business secretary Alan Duncan has “missed the point” in criticising credit card providers over 0% deals, according to Moneysupermarket.

Close