A&L has improved the terms on its premier account, offering interest of five per cent on the first £2,500 through till the end of 2006, after which the rate will fall to one per cent below Bank of England base rate (now 4.5 per cent). The A&L offering also includes an interest-free overdraft for the first 12 months, which then reverts to a rate of 5.9 per cent. Customers must pay at least £500 a month into the account to qualify.
Abbey's new account, which is only available to people who switch their current account to Abbey, pays 6 per cent interest on all balances up to £1,000 for a year. Amounts above this will receive 2.5 per cent.
Stuart Glendinning, a director of Moneysupermarket.com, the comparison website, said: "Although six per cent is a great headline rate for a current account, it is a little disappointing that this is limited to a balance of £1,000. Our figures indicate that over a relatively short period [two years], customers with a £1,500 constant balance are better off with the A&L account, even though the headline rate is lower."Reuse content