Money Insider: Hats off to Co-op for 'try before you buy' strategy

Competition remains intense across all areas of the personal finance arena with banks, building societies and card providers using their marketing expertise and bulging advertising budgets to try to capture a greater share of the market from their rivals.

Over the past few years this has resulted in increased use of cash incentives or short-term discounts being offered as the bait to tempt customers to sign up for a new card or account.

The problem with this strategy is that whilst it may win over a few more people in the short term, many will soon take their custom down the street in search of another financial freebie, or if they do stay, the card or account will soon become dormant as they weren't really interested in the product in the first place.

So whilst some people may benefit from a few quid extra in their back pocket, the real impact of the cash handouts may not be as impressive or profitable as the bank sales department's initial recruitment figures would suggest.

This week the Co-operative Bank launched an initiative to try to convince existing and new customers that their packaged current accounts offer good value for money and were worth a closer look. However it's refreshing to see that they haven't reverted to offering a cash incentive or the first couple of months at half price, instead customers are invited to test drive the account for themselves free of charge for a full 12 months.

Packaged current accounts have received plenty of bad press in the past, much of it deserved due to claims that customers were being switched to the fee-paying accounts without realising it or understanding what benefits the accounts were offering.

I'm not saying that a packaged account will work out to be the right choice for everybody, as it will come down to your own particular lifestyle and circumstances.

However, by giving people a whole year to try before they buy, the Co-operative Bank will win new business based upon the underlying features of a product and whether they are suitable rather than attracting those chasing a fast buck, a strategy that will win customers who will remain loyal for years to come. The incentive is available until 20 November 2010 to new and existing customers who use the bank's dedicated switching team to make their Co-operative Bank current account their main bank account.

Access to the offer requires a minimum monthly payment of £800 into the account

Aldermore and ICICI cut bond rates

This week a raft of high-profile fixed-rate products continue to be pulled or have rates cut.

The one-year bond market has seen most of the activity, with long-time chart-toppers Aldermore and ICICI Bank UK both cutting rates by 0.25 per cent.

On the plus side, Northern Rock has launched a one-year fixed-rate bond paying 3 per cent and is now sitting at the top of the best buys.

While 3 per cent may now be the top rate on a fixed-rate deposit, it's worth remembering that you can still get 2.80 per cent on an instant access account from AA Savings (including bonus for first year), so the additional benefit for fixing your rate and losing access to your cash for a year is actually very slim.

An alternative account is the new six- month fixed-rate bond from Leeds Building Society. Although a full half percentage point lower than the best one-year offering at 2.50 per cent, the big plus-point with the Leeds bond is that even though your return is fixed, you have the option of unlimited penalty-free access to your savings.

Away from fixed-rate bonds, Norwich and Peterborough Building Society launched its new e-Family Regular Saver account paying up to 5 per cent fixed in year one.

The online account is available to families with dependent children aged up to 16 (or 18 if in full-time education). You must pay in between £1 and £250 per month for which you earn 2 per cent fixed, however if you save every month for the first 12 months and make no more than one withdrawal during that period, you are rewarded with an additional bonus of 3 per cent.

Even though the savings market is a dark and gloomy place, there are still a few gems out there.

Andrew Hagger is a money analyst at Moneynet.co.uk

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Sales Executive / Foreign Exchange Dealer - OTE £40,000+

    £16000 - £40000 per annum: Recruitment Genius: A Foreign Exchange Dealer is re...

    SThree: Experienced Recruitment Consultant

    £20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

    Recruitment Genius: Collections Agent

    £14000 - £16000 per annum: Recruitment Genius: This company was established in...

    Day In a Page

    The long walk west: they fled war in Syria, only to get held up in Hungary – now hundreds of refugees have set off on foot for Austria

    They fled war in Syria...

    ...only to get stuck and sidetracked in Hungary
    From The Prisoner to Mad Men, elaborate title sequences are one of the keys to a great TV series

    Title sequences: From The Prisoner to Mad Men

    Elaborate title sequences are one of the keys to a great TV series. But why does the art form have such a chequered history?
    Giorgio Armani Beauty's fabric-inspired foundations: Get back to basics this autumn

    Giorgio Armani Beauty's foundations

    Sumptuous fabrics meet luscious cosmetics for this elegant look
    From stowaways to Operation Stack: Life in a transcontinental lorry cab

    Life from the inside of a trucker's cab

    From stowaways to Operation Stack, it's a challenging time to be a trucker heading to and from the Continent
    Kelis interview: The songwriter and sauce-maker on cooking for Pharrell and crying over potatoes

    Kelis interview

    The singer and sauce-maker on cooking for Pharrell
    Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

    Cameron lowered the flag for the dead king of Saudi Arabia...

    But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
    Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

    Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

    Humanity must be at the heart of politics, says Jeremy Corbyn
    Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

    Joe Biden's 'tease tour'

    Could the US Vice-President be testing the water for a presidential run?
    Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

    Britain's 24-hour culture

    With the 'leisured society' a distant dream we're working longer and less regular hours than ever
    Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

    The addictive nature of Diplomacy

    Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
    Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

    Fashion: Ooh, Lady Chatterley!

    Take inspiration from DH Lawrence's racy tome with equally racy underwear
    8 best children's clocks

    Tick-tock: 8 best children's clocks

    Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
    Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

    Charlie Austin: ‘If the move is not right, I’m not going’

    After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
    Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

    How Isis profits from destruction of antiquities

    Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
    Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

    'If we lose touch we’ll end up with two decades of the Tories'

    In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea