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How current accounts ‘offering over 10%’ could be a salvation for savers

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Current accounts with cash incentives could be a salvation for beleaguered savers, with some offering an equivalent interest rate of up to 11%, according to analysis.

M&S Bank currently offers new switchers a £100 gift card plus an additional £10 a month gift card meaning they could make £220 in the first year, which based on a balance of £2,000, is an equivalent interest rate of 11%.

There has been a string of new cash reward initiatives launched this year as banks battle it out to attract current account customers.

The Co-op now offers £150 upfront and up to £5.50 a month on debit card spending. This adds up to £216 worth of cash in the first year, the equivalent interest rate of 10.80% on a £2,000 balance.

HSBC gives switchers £150 plus another £50 after 12 months, which is £200 or 10.00% equivalent interest on £2,000.

Rachel Springall, finance expert at Moneyfacts, said: “Savers and spenders should definitely consider using a current account as a way of getting something a little extra, particularly with savings rates plummeting to record lows. Low interest rates encourage spending, but consumers could still take advantage of cash rewards if this savings aren’t going very far.”

Many of the new current account offers have eligibility criteria, which switchers should check before making any decisions. These include: the need to bank online, a minimum amount deposited each month and setting up a certain number of direct debits.

The table below shows some of the other attractive offers on the market:



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