Choosing a Current Account
Many of us might spend hours poring over the best buy tables and reviews when choosing a mortgage, a savings account, or a credit card, but how many of us take the same amount of care when choosing a current account?
Current accounts are so necessary for day to day life that they are often overlooked - a case of familiarity breeds contempt, maybe.
There are, though, considerable differences between the many accounts on the market, and are you sure that you're not being overcharged, or missing out on some attractive benefits?
The Ideal Account
If you could write a wishlist of what you'd want from a perfect current account, the following features would probably be on it.
High Interest On Balances
Traditionally, current accounts did not pay any significant interest on your in-credit balances, with figures such as 0.2% APR being typical. These days, with increased competition - especially with internet and direct banking - you can earn significant rates that compare favourably with some savings accounts.
Banks profit from investing the combined balances of their customers, so why shouldn't you get a piece of the pie too?
Low Rate On Overdrafts
If you're likely to go overdrawn at some point, or even regularly, make sure you won't get stung with high interest charges. Most accounts will offer some form of fee-free overdraft - meaning you won't be charged a fee for being given an overdraft limit - but you'll still be charged interest on your overdrawn balance in almost all cases.
An exception to the rule, albeit for a limited period, is the Alliance and Leicester Premier Plus account which features an introductory offer of 0% APR for 12 months, and then goes back to % APRR.
Cashback
Cashback is a common feature with credit cards, where a small percentage of everything you spend is credited back to you. This concept has recently been applied to current accounts with Halifax Money Back.
With this account you get a debit card featuring 1% cashback on everything you buy with it, up to a maximum spending total of £10k.
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