Current account perks shrink: top deals now on the market
The low interest rate environment is taking its tolls with banks offering fewer perks for savers.
Banks are expected to retain more capital, which could result in them spending less on perks for customers. Data site Moneyfacts warns this means decreasing and disappearing rewards, as already seen since the start of 2017.
The best current accounts on the market
Moneyfacts reveals the best deals around right now, which could help shoppers choose the most rewarding current account for their monthly spending:
Rachel Springall, finance expert at Moneyfacts, said: “As banks are urged by the Bank of England to raise capital over the next few years for protection, it is entirely possible they will choose to constrict rewards for current account customers in order to retain more cash.
“Free banking is already a myth as most customers will pay for certain services, and for those accounts that do offer a reward, it seems that time is running out to take advantage.”
NatWest cut the cashback on its Reward account last month from 3% to 2%, while Halifax cut the £5 monthly credit to £3 on its Reward Account in February and Nationwide is expected to raise the monthly fee on its FlexPlus by £3.
Springall said these changes might not have a huge impact from day one, but consumers “will no doubt feel the pinch over the longer term”.
She added that of the banks that do still offer cash rewards, they might not be the best choice for customers who dip into their overdraft occasionally or fail to meet certain eligibility criteria.
“While the Halifax Reward Account appears to be the best deal for switchers and spenders, their overdraft could wipe out any gains if customers don’t stay in credit, due to its daily usage fees.
“As with any current account, it is vital for consumers to compare the entire deal and switch if they find that their loyalty is wasted. Now is as good a time as any to review finances and get something more rewarding.”