Santander is increasing the interest rate it is offering on some of its current account range to a market leading six per cent.
Abbey and Alliance & Leicester, which are both owned by the Spanish banking giant, are offering the new rate on a limited number of their current accounts
Customers who open an Abbey Preferred In-Credit Rate or A&L's Premier Direct
and Premier 50 accounts from Monday June 8 will earn the new rate of six per cent, higher than most other current accounts on offer at the moment.
Santander says the new rate is "bucking the trend" in a current account market where many of its competitors are offering customers returns as low as 0.5 per cent on their money.
The competitive rate is even higher than many savings accounts
are currently offering, as providers continue to reflect record low interest rates which have stood at 0.5 per cent for four months.
Customers will not have to maintain a minimum balance to receive the new rate of six per cent, as it pays the rate on balances as low as zero per cent, and they will also benefit from the rate being fixed for one year, offering a relative amount of certainty as consumers seek security for their money.
Gillian Almond, manager of Abbey current accounts
and A&L current accounts
, explained: "Abbey and Alliance & Leicester continue to buck the trend in the current account market by providing even better value at a time when many other providers have reduced the rate they pay to customers.
"With the Bank of England base rate being at an all time low, we know consumers are increasingly shopping around to make the most of their money. By switching to a current account customers could earn 60 times more than the interest they can get from other high street banks."
Commenting on the new rate, Michelle Slade, finance expert from Moneyfacts.co.uk, said: "Within these testing times it imperative to make every penny count and an interest rate of 6.00% AER is streets ahead of the rest of the market. Current accounts are an important part of any customer's financial portfolio and with many of the other high street providers paying no interest at all, customers really should consider switching."
Kevin Mountford, head of banking at moneysupermarket.com, believes that the move from Santander firmly establishes it as "the new super-brand in town."
The new rate is "undoubtedly an enticing option for those who remain permanently in the black," he added.
Consumers should not let the thought of switching put them off from getting a better deal on their current account, he continued, explaining that most of the major banks now have dedicated switching services which carry out the majority of the paperwork on the customer's behalf, making it much easier to switch current accounts. Compare current accounts to apply for the Abbey Preferred In-Credit account or the Alliance & Leicester Premier Direct and Premier 50 current accounts.
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