moneysupermarket.com - new current account launches

Commenting on the launch of two new current accounts - the Preferred Current Account and Everyday Current Account from Santander, Kevin Mountford, head of banking at moneysupermarket.com said: "The move by Santander to offer a daily monetary cost rather than an interest rate offer on overdrafts is not surprising given Alliance & Leicester had the same overdraft structure. For anyone who uses their overdraft regularly, this is one of the cheapest overdrafts on the high street. The industry has been moving to these types of fee structures saying that they are easier for consumers to understand.

"In reality, the transition to daily fees may in fact cause confusion for many consumers, and no doubt there will be winners and losers. This said, as an all-round offer, the accounts from Santander are very attractive with a number of first year teasers such as offering 5 per cent AER for balances up to £2,500 and a 12 month interest free overdraft for its Preferred Current Account available to those who switch from other providers. However consumers should be aware they need to pay in a minimum of £1,000 per month, for both single and joint accounts, or they will face a £2 per month under-funding fee. Existing customers will not be transferred to this new account, although they can apply for the new product. Those unable to pay £1,000 per month into an account should look at the Everyday Current Account which has no minimum monthly credit requirement. A small buffer for dipping into your overdraft is also allowed with a fee-free period of four months.

"Consumers should consider whether, despite the initial tempting offers, these accounts offer value over time. Although consumers may not wish to switch current accounts on a regular basis, it is important to review you account from time to time to make sure it suits your financial situation, otherwise you may fail to get the best value."