Banking experts warn that while you may think current accounts are all the same, these financial products can differ wildly from one provider to another.
There are a myriad of personal and business bank account providers in the UK, and each and every one that offers current accounts has different terms and conditions that they apply to their products. Some accounts are wonderful while you’re in the black, but have truly punishing overdraft facilities, while others are extremely forgiving if you fall into the black but offer little else in the way of benefits.
However, comparing current accounts is not always easy. Current account providers have traditionally paid a bare minimum interest on balances only to charge a completely different overdraft rate, yet many providers have begun to re-structure their offerings as of late.
Many banks and building societies have done away with in-credit interest. However, the largest changes have come from providers, such as Halifax, who offer a current account which will credit a customer with a monthly payment of £5, provided they deposit a minimum of £1,000 every month, adding up to an annual £60.
However, Halifax no longer charges annual interest on overdrafts, instead charging its customers by the day as long as their account remains in the red. On overdrafts of £2,500 and under, customers can expect to pay £1 every day, while pre-approved overdrafts in excess of this will cost £2 daily – and while these fees can add up quite quickly over time, any Halifax saver that earns their £5 reward for making at least £1,000 a month has a grace period of five days to get back in the black.