A new announcement from the British Bankers’ Association recently said that current accounts were not designed with the intent to save money, instead insisting that they should be used in order to manage cash in a day-to-day manner.
The BBA recently made the admission that while current account products routinely have a small interest rate associated with them, the main aim of the products is not to act as a vehicle for savings.
Instead, the BBA insisted, current accounts are designed to aid in such day-to-day money affairs such as withdrawals from cash machines or direct debits.
The BBA commented that many banks in the UK offer transactions free of any fees, which unlike many of their global counterparts, result in consumers not having to pay out on any chargers as long as their accounts are in the black.
The BBA made a recommendation to consumers to conduct careful research into the different varieties of financial services providers that have savings account offerings in order to choose the best product for their needs.
For any savers currently looking to compare business bank accounts, financial services provider Halifax recently publicised details regarding how a large number of their savings customers are neglecting their deposits; in particular Halifax detailed how ISA deposits for the second half or 2010 are lagging behind the first year results, which had many savers topping their ISAs up.
Industry experts believe that reticence on the part of consumers to utilise savings products are in part due to very few of those products offering an interest rate that is high enough to combat the currently above-target inflation rate in the UK, which has been holding steady at around 3.1 per cent. Despite the persistently high rate, the Bank of England’s Monetary Policy Committee recently voted to maintain its historically low 0.5 per cent base rate for another month, an action that some economists equate with encouraging inflation further.