Halifax cautions against current account headline rates

10 July 2007
Current account customers should stay alert to the longer-term financial implications of their provider's interest rate offer, looking beyond headline introductory rates, Halifax has claimed.

Longer-term deals can be better earners after the initial short-term offer expires, the bank believes.

Halifax argues that, with the £100 switching incentive it is now offering current account customers, new customers stand to save £400 over two years on a balance of over £1,400, compared to prospective earnings on an Abbey account.

The eight per cent interest rate offer from Abbey lasts for one year, noted Paul Marriot-Clarke, head of banking at Halifax.

But a rate that "starts high and stays high" helps customers who stick with the same current account provider save over the longer term, he said.

Recent research from Smile online bank showed that many customers are loath to switch on a regular basis, with more married people getting divorced than changing current account provider.

At the same time, switching sites such as moneysupermarket.com have urged customers to keep looking around for better deals and switch current accounts as soon as interest rates make it more advantageous to go elsewhere.

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