Abbey Launches 8% Current Account

by Gill Montia

Story link: Abbey Launches 8% Current Account

Abbey has put itself ahead of the market with the introduction of a current account that offers an eight percent rate of interest. The account will be available to new customers from July 2 and will pay eight percent credit interest on balances of up to £2,500, for one year only. This is conditional on the account holder paying at least £1,000 into the account each month. Abbey offers two main types of current account: one pays a standard interest rate of 2.5 percent and has an authorised overdraft rate of 16.9 percent, while the other has a standard interest rate of 0.10 percent and an authorised borrowing rate of 10.9 percent.

In the case of Barclays, HSBC, Lloyds TSB and NatWest the typical interest rate on a current accounts is 0.10 percent. Despite increases in the Bank of England base rate, the figure has remained the same over the past five years. Moneysupermarket.com, the price comparison website, sees competition for current accounts increasing. The Halifax recently launched a £100 bonus for those prepared to switch and further incentives are expected from High Street banks, who are interested in the selling opportunities afforded by new customers.