moneysupermarket.com: A&L's £100 switching incentive

Commenting on the return of Alliance & Leicester's £100 switching incentive, Kevin Mountford, head of banking at moneysupermarket.com said: "2009 may well be the year of the current account after a period of relative stagnation as providers wait to see the outcome of the ongoing OFT court case on bank charges. At least two major providers have initiatives due early this year, as they step up the battle for the lucrative current account market. Consumers need to be vigilant though and look carefully at the different offers to see which will suit their needs. For example the right current account for a customer who never goes overdrawn will be different than for a customer who does dip into the red regularly.

"A&L introduced a £100 switching incentive last year that proved very popular so it is good to see them kicking 2009 off with a bang and bringing the cash offer back. But whilst £100 to switch accounts may seem tempting, consumers need to look at the bigger picture. The offer is only available to their Premier account range, which pays just 1 per cent in-credit interest - for those who are always in credit, HBOS' High Interest Current Account may be a better deal, paying 2.5 per cent interest. Having said that, it's worth looking at A&L's offering for the overdraft facility - at 0 per cent for a year, this could prove a winner. 2009 is expected to be a tough year for consumers, and likely to be more about saving money where possible, rather than making it, so this could really help.

"In addition to A&L's offer, February will see HBOS launch its Reward Current Account, which will offer consumers £5 per month in interest, regardless of the balance held. But again, it's important to look at how you will use the account - with an overdraft structure that charges £1 per day for up to £2,500, this could prove costly, even if you only go into the red by a couple of hundred pounds.

"There are really only three propositions in play in the current account market - price, service, and tactical initiatives. Past experience at moneysupermarket.com has shown tactical initiatives, such as the Alliance & Leicester switching campaign, are the ones that seem to get consumers to take action in a market that generally sees low levels of switching. Consumers are looking to make the most of every penny at the moment, and an offer of £100 to switch to a pretty good, if somewhat basic, account can't fail to lure new customers."