27 June 2007
Consumers have been warned not to be too taken in by the rising number of limited offers available on current accounts from UK banks.
Independent online price comparison and switching service uSwitch.com has warned consumers not to be lured in by the offers, following the launch of Abbey's 8% AER current account.
Abbey's offer is the latest in a recent trend of similar deals which Mike Naylor, Personal Finance Expert at uSwitch believes could lead to customers being out of pocket at the end of the year if they fail to switch accounts.
Although he explained that customers switching to this account could get around 40 interest in just one year, eight times the 4.35 earned with the biggest four banks in the UK, he stated that the account is "clearly designed to attract new business" and failed to address the needs of existing customers.
"The main drawback to this account is the fact it's a one year offer. The interest earned in the first year is high, but this would drop considerably when the account defaults to an in-credit rate of just 2.5% AER in month."
However Mr Naylor did admit that the deal showed Abbey's commitment to investing a large amount of money in giving customers a good return and a better deal.
"Any incentives that banks can offer to fuel the current account switching market is good news for the industry as this is still an area of complete inertia."
© 2008 Adfero Ltd
Content for the uSwitch.com market news service is provided by a third party, Adfero Ltd. Whilst uSwitch.com makes reasonable efforts to check the reliability of this content, uSwitch.com does not guarantee the accuracy thereof or endorse the views or opinions given by Adfero Ltd, unless expressly stated otherwise.