Lots of current accounts have recently updated their bank charges and most are not in your favour. We look at how you can beat the banks on current account charges.
If you are always in credit
The average credit interest rate for a £1,000 balance has slumped to 0.76% from 1.91% two years ago, said Defaqto, the data firm. Up to 6% can be earned on balances up to £2,500 from Alliance & Leicester’s Premier Direct Account if at least £500 a month is deposited. It also has a 0% rate on authorised overdrafts for a year.
Dipping into Overdrafts
The lowest rate for arranged overdrafts comes from Cahoot, which charges no interest up to £100 and a rate of 11.8% up to £1,000. Citibank offers a £500 interest-free overdraft on the Citibank Access account.
If you want Benefits
About 25% of adults earning more than £50,000 pay a monthly fee for their current account, according to Mintel, the market researcher. Fees can be up to £20 a month but only 12% of those with the accounts use all the benefits, said Which?, and only a handful of accounts offer benefits outweighing account costs. Some deals can be worth it, though. Barclays Additions Active offers worldwide multi-trip insurance for families worth £191, against the account’s cost of £180 a year. It also has a 12.9% authorised overdraft rate and a £300 interest-free overdraft limit.