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18 Oct 2019

News

Current account customers feel the pinch

On 10 April the Bank of England announced a 0.25% cut in interest rates. Since that time the current account market has seen plenty of rate changes but some lenders have used the opportunity to tweak their rates by more than the 0.25% cut. Michelle Slade, analyst at Moneyfacts.co.uk, comments:

“The last month has seen some institutions cut credit interest rates by as much as 1.75% and others put overdraft rates up rather than down. A lot of the biggest moves have been by the major high street lenders, meaning a large proportion of the population are going to be hit at a time when they can least afford it.

“This is really disappointing news for current account customers, particularly in the wake of the success in the High Court by the Office of Fair Trading (OFT). When the OFT announced that credit card default fees were too high, the institutions cut these charges but raised charges elsewhere to compensate for the lost revenue. 

“It could well be that the banks and building societies are pre-empting a reduction in overdraft fees when the OFT case is finally settled. As a result, they are reducing credit interest rates and increasing overdraft rates now in order to continue to fund the free banking we are used to in the UK.

“The credit crunch is still having a massive impact on all our banks and building societies. The effects are being felt in all aspects of personal finance, with current accounts the latest area to feel the pinch. “

 

Credit interest reductions 

Institution

Account

Tier

Previous Rate

Current Rate

Reduction

Date of Change

Alliance & Leicester

Premier Current Account

£1

1.49%

0.99%

-0.50%

1/5/08

£2,501

0.10%

0.10%

0%

Chelsea BS

Classic

£2.5K

2.20%

1.80%

-0.35%

21/4/08

£5K

2.70%

2.35%

-0.35%

£10K

2.95%

2.60%

-0.35%

£25K

3.50%

3.15%

-0.35%

£50K

3.75%

3.40%

-0.35%

Clydesdale Bank

Student Account

£1

3.25%

2.90%

-0.35%

2/5/08

Halifax

High Interest Current Account*

£1

6.00%

5.00%

-1.00%

1/5/08

Ultimate Reward Current*

£1

6.00%

5.00%

-1.00%

HSBC

Premier Bank Account

£1

0.10%

0.10%

0%

9/5/08

£10K

1.14%

0.90%

-0.24%

£50K

1.88%

1.39%

-0.49%

£100K

2.18%

1.69%

0.49%

Leeds BS

Premier Current Account

£100

1.10%

0.90%

-0.30%

1/5/08

£10K

1.30%

1.00%

-0.30%

£25K

1.85%

1.55%

-0.30%

£100K

2.60%

2.30%

-0.30%

£150K

3.25%

3.00%

-0.25%

Nationwide BS

FlexAccount**

£1

3.75%

2.00%

-1.75%

1/6/08

Norwich & Peterborough BS

Gold Current ***

£1

0.40%

0.10%

-0.30%

22/4/08

Smile

Current Account

£1

2.52%

2.25%

-0.27%

25/4/08

Smilemore

£1

2.52%

2.25%

-0.27%

Yorkshire Bank

Student Account

£1

3.25%

2.90%

-0.35%

1/5/08

Source: Moneyfacts.co.uk 12.5.08

* No funding
** Funding of between £1K and £1,499
*** Funding of less than £500pm

Authorised Overdraft Increases

Institution

Account

Tier

Previous Rate

Current Rate

Increase/Decrease

Date of Change

Halifax

High Interest Current Account*

£1

18.9%

19.5%

+0.60%

1/5/08

Current Account*

£1

18.9%

19.5%

+0.60%

Nationwide BS

FlexAccount

£1

9.9%

12.9%

+3.00%

1/6/08

NatWest

Advantage Gold

£1

18.59%

18.49%

-0.10%

28/4/08

£1K

18.19%

18.49%

+0.30%

£5K

16.56%

18.49%

+1.93%

Advantage Private

£1

11.9%

13.5%

+1.51%

Current Plus

£1

19.99%

19.24%

-0.75%

£1K

19.41%

19.24%

-0.17%

£5K

17.37%

19.24%

+1.87%

Royal Bank of Scotland

Interest Paying Current Account

£1

19.95%

19.24%

-0.71%

28/4/08

£1K

19.05%

19.24%

+0.19%

£5K

17.05%

19.24%

+2.19%

Royalties

£1

18.25%

18.20%

-0.05%

£1K

17.85%

18.20%

+0.35%

£5K

16.25%

18.20%

+1.95%

Royalties Gold

£1

16.35%

17.00%

+0.65%

£1K

15.65%

17.00%

+1.35%

£5K

14.55%

17.00%

+2.45%

Royalties Private

£1

11.15%

12.25%

+1.10%

£1K

10.65%

12.25%

+1.60%

£5K

10.25%

12.25%

+2.00%

Private Bank Account

£1

18.28%

18.49%

+0.21%

£1K

17.80%

18.49%

+0.69%

£5K

15.80%

18.49%

+2.69%

Source: Moneyfacts.co.uk 12.5.08

* No funding

Other changes

Institution

Account

Change

Alliance & Leicester

All Accounts

Foreign usage conversion charge increased by 0.20% to 2.95% and foreign usage cash transaction charge increased from 1.50%, min £1.50 to 2%, min £2

Lloyds TSB

Select & Select Plus

Account fee increased from £7 to £7.95

Gold Service & Gold Service Plus

Account fee increased from £10 to £12

Platinum Current & Platinum Current Plus

Account fee increased from £15 to £17

NatWest

Advantage Blue

Account fee increased from £6 to £6.95

Advantage Gold

Account fee increased from £12 to £12.95

Advantage Private

Account fee increased from £18.50 to £19.95

Royal Bank of Scotland

Royalties

Account fee increased from £6 to £6.95

Royalties Gold

Account fee increased from £12 to £12.95

Source: Moneyfacts.co.uk 12.5.08

CURRENT ACCOUNTS

 

Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry. 

 

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