As personal and business bank account providers compete to attract as many current account customers as they can, the banking landscape has become a veritable clash of the titans, industry experts report.
With the emergence of The Co-operative and Virgin money as serious market players, a bounty of new deals have been offered. Potential customers are being offered up deals such as free insurance, 0 per cent overdraft interest rates, and even cash bribes by High Street providers, which contrasts strongly with their traditional ‘tale it or leave it’ attitude.
With Brits traditionally recalcitrant when it comes to switching current accounts, even in the face of shoddy service and punishing charges, banking experts say this new trend could lead to benefits for beleaguered UK households. The latest bank to throw their hat in the ring is First Direct with a an offer of £125 to anyone who switches their account to the lender through the use of a leading price comparison website, which follows on HSBC’s deal offering 6 per cent interest on as much as £2,500 in balances for a period of 12 months and the Co-op’s ‘agreed’ overdraft charge suspension through the end of March, a move the bank has taken in order to offer some respite for consumers with festive season spending hangovers.
Banks have always been keen to grow the number of current account customers in their stables as it gives them ample opportunity to hit their account holders up for deals on other financial products such as insurance, mortgages, and loans, all of which are much more profitable for banks than current accounts.