New Abbey account raises the bar (but only in the short term)

Michelle Slade, Personal Finance Analyst at Moneyfacts.co.uk, comments: “The launch of Abbey’s 8% current account takes the battle to another level. But you need to be aware that this 8% is short lived, after a year this will fall to 2.50% and it’s sadly not available to existing Abbey customers.

“For anyone looking for a longer term relationship, the Halifax 6% account will offer better returns over several years. It’s not always best to choose the highest rate: often a decent rate that is here to stay works out better.

If you’re someone who keeps a very large credit balance on your savings account, don’t forget the ‘First account’ from Coventry BS which pays 5.94% gross (in the first year) on the first £250,000, rather than the standard £2,500 limit that accompanies most ‘in credit’ current account offers.

“It’s good to see that the banks are upping their game to win your current account business. It’s about time they stopped offering 0.10% credit interest, and charging you up to 20% to borrow on an overdraft. After all current accounts are big business and a platform from which to sell those potentially lucrative pensions, insurance and mortgage products.

“With so many good deals now on the market, don’t let your bank get away with offering you a poor product, especially if there is financial return for switching, either by means of a great rate or financial incentive. You would be a fool not to switch.”