Most high street
current accounts charge an astronomical overdraft rate while paying next to nothing on credit balances.
And yet despite this, two thirds of us have stuck with the same current account provider for the last decade.
Why do so many people show their bank such loyalty when they are treated so abysmally in return?
We take a look at a couple of the best current accounts on the market today.
Get high interest, low overdraft
Our top recommendation is the
Alliance & Leicester Premier Direct current account. For starters, it pays a whopping 6.5% rate on the first £2,500 in your account (falling to 0.1% on all additional funds).
This comfortably trounces the 0.1% paid by most of the biggest banks.
And for those who find themselves dipping into the red each month, the Premier Direct account also comes with a 0% overdraft for the first 12 months.
After 12 months, the 0% overdraft continues but a usage fee of 50p a day (up to £5 a month) applies if you use the arranged overdraft. Maximum overdraft limit is £2,500.
Compare this to RBS, NatWest and HSBC, which all have overdraft rates in excess of 19%.
Don’t get your accounts confused
It’s worth mentioning that the Premier Direct account is not the same as the Premier or Premier 50 current accounts, which Alliance & Leicester is offering to pay you £100 to switch to.
While the lure of a quick hundred quid is no doubt appealing, neither of these accounts offer as good a deal in the
Premier Direct.
For example, the Premier account also comes with the overdraft offer, but credit interest is only 1% on the first £2,500.
The Premier 50 offers both the attractive rates of the Premier Direct plus the £100 switching bonus, but costs £10 a month to maintain.
If customer service is vital to you
In a recent customer service survey by consumer magazine Which?, A&L came in below average (although it still ranked above Abbey, Barclays and Halifax).
So if customer service is your prime concern, why not consider switching to
First Direct instead. Not only did the bank come in second in the aforementioned survey (after Cooperative Bank), but its current account also features a £250 fee free overdraft. Better still, they’ll also pay you a £100 upon opening the account.
Do note that you’ll need to deposit at least £1,500 a month or face paying a £10 a month fee.
