The Bank of Scotland has launched a current account paying five per cent on all deposits in the latest salvo of an increasingly bitter struggle over sector customers.
The new deal pays out more than many savings accounts. Some of the UK’s largest banks, such as NatWest, HSBC and Barclays still pay less than 0.1 per cent interest.
According to Bank of Scotland calculations, customers receiving less than 0.1 per cent on their current accounts would be better of by £1.4 billion a year if they switched.
“Customers are voting with their feet and leaving the big four,” said Benny Higgins, Halifax-Bank of Scotland (HBOS) Retail chief executive.
“This account provides another big incentive to do just that.” Bullish competitors have welcomed the increased competition, however.
“Abbey’s banking report has again shown this year that 42 per cent of people are not happy with their current account because of poor interest rates,” said an Abbey statement.
“It really is time for people to vote with their feet and switch to a better deal.”
HBOS has seen its current account customer share climb since launching its first high-interest account in 2001, with 12 per cent now saying that it has the best current account rates.
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