Abbey offers improved current accounts

04 October 2005
Abbey is launching two new products this week: a new high paying current account and Fixed Rate Monthly Saver Account, both offering six per cent gross AER, guaranteed for 12 months.

The high-paying six per cent current account is limited to people moving to Abbey using the bank's account transfer service, and who pay in a minimum of £1,000 every month.

Head of banking marketing at Abbey, Reza Attar-Zadeh, said: "This is a simple, straightforward offer which really gives people great value, with no fees.

"We know that most people in fee-paying accounts rarely get the full benefits of everything that is on offer, so we’re just offering the best current account interest rate available and access to Abbey’s best savings rate, as that’s what most people want."

However, there are some restrictions: the offer is only available for a limited amount of time and for people who have several accounts the Abbey six per cent current account must be their main account. Part of the interest will be paid monthly (2.5 per cent AER) and the remaining AER will be added after a year.

Also, the interest rate of six per cent is only payable for the first £1,000 after which customers will receive 2.5 per cent gross AER on any remaining balance.

The Abbey six per cent Fixed Rate Monthly Saver account is geared towards people who want to save. Customers must make 11 consecutive payments of between £20 and £250 by standing order to qualify for the full six per cent AER.

At the end of the 12 months, balance will be automatically transferred to the Abbey Monthly Saver Account which pays out 4.75 per cent AER.

However, some financial commentators feel that the Abbey six per cent current account is not all it is cracked up to be:

Director of current and savings accounts at financial website, moneysupermarket.com, said: "The new Abbey current account is a case of all that glitters is not gold. Although six per cent is a great headline rate for a current account, it is a little disappointing that it is limited to a balance of £1,000.

The size of the interest rate fall after one year - where the rate drops from six per cent to 2.5 per cent - seems steep also."

The new accounts are offered on a limited basis and both are available from the beginning of this week.

Changes to Abbey's system also mean that customers moving over to Abbey now have a named contact at the bank who will take charge of overseeing the transfer.

To read more about Current Accounts, click here.


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