19 September 2007
First Direct current account customers will no longer receive interest on positive balances, it has been announced.
The bank has announced that from November 1st all customers with First Direct's bank account will be transferred to a new 1st account with existing interest of 2% AER cut to 0%.
First Direct, owned by HSBC, stated that the change in interest rates followed research among current account holders revealing that they were more concerned about customer service than interest rates.
Customers will now be provided with a interest-free overdraft of up to £250 as well as two new savings products.
They will also be able to receive free text messages to update customers who are approaching their overdraft limit.
First Direct's Chief Executive, Chris Pilling, said that research showed that people were not that interested in the amount of interest they accrued.
"A staggering 96% of our customers told us that credit interest wasn't an important factor in choosing to bank with First Direct," he said. "And almost 70% didn't know the rate of interest on their current account."