Alliance & Leicester rate improvements

Sean Gardner, Chief Executive of MoneyExpert.com, said: “The new current account rate from Alliance & Leicester at 8.5 per cent puts them to the top of the best buy tables and anyone in the market to switch should grab it. But they need to go in with their eyes wide open.

“A&L is a market leader in current accounts – there are still plenty of banks that refuse to pay more than a dismal 0.1 per cent credit interest, so 8.5 per cent is a hefty bonus which beats many instant access savings accounts.

“But of course there is a catch. In this instance, the rate of 8.5 per cent only lasts one year before dropping to one per cent below base rate which is currently 4.25 per cent.

“And if you are a current Premier Direct customer, the new rate isn’t available to you.

“That’s not to discourage people from signing up – 8.5 per cent is a fantastic deal, and even the go-to rate of 4.25 per cent is far better than the majority of current accounts. And the overdraft facilities are very attractive.”