Switching incentive from Alliance & Leicester

Commenting on Alliance & Leicester's £100 switching incentive, Kevin Mountford, head of current accounts at moneysupermarket.com, said: "With a current account offering 8.5 per cent, Alliance & Leicester has been attracting people who typically have £1,000 or more in their account.

"Now it is after a greater slice of current account action from those who generally have smaller balances. Its new £100 switching incentive is a juicy carrot for those who struggle to make ends meet each month.

"The account only pays one per cent, but its £100 incentive is coupled with an overdraft charge of only 50p per day, which is capped at £5 per month.

"The maths on A&L's two headline grabbing current accounts is pretty simple. A typical £2,500 balance on its 8.5 per cent Premier Direct account will earn you £212.50 during the year. But if you flirt with low or nil balances, you are more likely to be tempted by the £100 offer on its Premier account.

"Alliance & Leicester is clearly strengthening its position in the current account market, with it looking to serve the needs of most individuals."