Halifax has thrown down the gauntlet to the ‘big four’ banks by launching a new high-interest current account.
The High Interest Current Account pays 5 per cent interest on balances up to GBP 2,500 – 50 times more than many rival accounts. However, you have to pay in at least GBP 1,000 a month to qualify for this rate.
The bank hopes the move will increase the market share of the HBOS group (which includes Halifax and the Bank of Scotland) from 12 per cent of current accounts to between 15 per cent and 20 cent.
Current account low interest
Halifax highlights that the big four banks – Barclays, HSBC, Lloyds TSB and NatWest/Royal Bank of Scotland – typically pay just 0.1 per cent interest on mainstream current accounts.
Which? money expert Teresa Fritz said: ‘Halifax aren’t being quite as innovative as they would like to be seen. They’ve had a current account which pays higher interest provided you pay in at least GBP 1000 a month for some time. The interest was 2.53 per cent – so all they’ve done is up this rate.
‘Our suggestion is that you ignore this and go with the Which? best buys. Alliance & Leicester currently offer their Premier Direct Current Account at 5 per cent interest and the minimum amount required to go in each month is only GBP 500. Nationwide BS Flex Account offers interest at 4.25 per cent with GBP 1000 minimum requirement – which is slightly less than Halifax, but you get the bonus of free banking abroad with Nationwide.’
Halifax claims that customers could get up to GBP 1,065 extra over the typical life of a current account by switching to its new account.
The new account is available to both new and existing customers and can be accessed through Halifax branches, through the internet and by phone.