Short-term equals short-changed

Short-term interest rate offers are no more than "headline-grabbers" , according to new research by Halifax.

Current account customers who are swayed by short-term offers of high interest rates lose out financially as soon as their offer is over, if not before.

Figures from Halifax show that a customer switching to a Halifax High Interest Current Account, with an average current account balance, could be over £300 better off (after basic rate tax) over the life of their account compared to one switching to Abbey. When adding in the current £100 switchers' offer, someone switching to Halifax is over £400 better off than with Abbey. Even after just one year, someone would be over £80 better off switching to Halifax during the current switchers' offer.

Customers with the Big 4 High Street banks who are still being paid just 0.1% Gross on their balances are short-changed even more by their bank. On credit interest alone, a customer with an average balance would be over £60 better off every year switching to Halifax.

Commenting, Paul Marriot-Clarke, head of banking at Halifax, said, "Why accept an offer that sees your rate fall by two thirds after a year, when you can get £100 up-front and a rate that starts high and stays high? Even without our £100 switching offer, after just 2 years our High Interest Current account will have earned you more interest than with Abbey.

"Those customers who receive just 0.1% on their current balances are being short-changed with small change as interest. Switch now and you could be over £150 better off after just a year."