Current account offers ‘might not be what they seem’

Consumers should be aware that current account offers are often not what they seem, a building society has warned.

According to the Coventry, the big players in the current account market use “headline grabbing” interest rates to attract people to their products.

However, in practice the advertised high rate of interest is only paid on a “relatively small” balance in the account, a spokeswoman said, adding that this leaves the customer “short changed”.

The spokeswoman continued, saying that her company believes customers “could be misled by headline rates”.

She explained that the way many banks and building societies pay interest means that people who use their current account to handle their salaries might lose out.

Customers will have “a significant balance at the start of the month” but if this is steadily withdrawn over the course of the month, they will find “a sizeable proportion of their money earning almost no interest at all”.

The current Bank of England base rate – which current account interest rates are calculated from – is 5.75 per cent.

© Adfero Ltd

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