Money Insider: Post Office prepares to deliver a fresh option in current accounts
Friday 17 May 2013
Will the Post Office's foray into the current-account market really shake up the retail banking sector, as some experts are predicting?
A pilot of current-account options will be run across branches in East Anglia, before being extended elsewhere in 2014.
In its favour, the Post Office is a trusted household name with an established network of more than 11,500 branches across the country.
But will this be enough to tempt people to switch their bank account, an area where lethargy is rife? Even though customers complain about poor service, hidden charges and hard-sell tactics, those who actually move their account still remain in the minority.
Post Office customers will have the choice of three accounts available: "standard", "packaged" and "control".
The standard account is a no-frills, debit-card product, which can be opened with a £100 deposit
There's no interest paid on credit balances, but the overdraft interest rate of 14.9 per cent effective annual rate (EAR) is among the most competitive on the market.
It's good to see that the Post Office hasn't gone down the route of daily fee charging for overdrafts, and although there will be no charges for unauthorised overdrafts, you will still be stung with a £15 fine for any unpaid items.
The packaged account charges £8 per month and includes European multi-trip travel insurance and vehicle breakdown cover. The full details of these policies have not yet been released, so it'll be interesting to see how comprehensive these add-on products are and how they stack up against competitor products.
Again, the interest rate for overdrafts is a very impressive 14.9 per cent EAR, but unless you make full use of the inclusive benefits, then you'd be better off saving the £96 annual cost and opting for the standard account.
The last of the trio is the control account, which is aimed at those who don't want to incur expensive unauthorised banking fees and unpaid charges.
This account costs £5 per month and while it gives people access to online banking, telephone banking and a nationwide network of ATMs, there is no debit card available.
Although avoiding expensive banking charges may help some people, others are likely to balk at paying £60 per year for what is just a basic bank account.
There's nothing particularly new or exciting with these products, but then many people are just looking for something that does the job, no bells and whistles, just a no-nonsense account without hidden or excessive fees, all backed up with consistently good customer service and a system that doesn't keep suffering IT problems.
From September, the new, seven-day switching rules begin. I'm yet to be convinced that it's the time it takes people to switch that's holding them back. I think it's more to do with the perceived fear that payments may go astray during the transfer process.
If I'm wrong, and disenchanted, high-street bank customers start switching to the Post Office in their droves, let's hope there is sufficient staff resource available to handle the extra footfall in branches.
With so many customers disillusioned with their current bank, there's a huge pot of new business just waiting to be convinced that the Post Office is a better-banking alternative.
There's no reason why it shouldn't become a major competitor in the current-account market, but much will depend on its ability to build a reputation for reliable customer service across its huge network of branches.
Better deals on offer for first-time buyers
According to the Council of Mortgage Lenders, 19,100 mortgages worth £2.4bn were advanced to first-time buyers in March. This is a big improvement on the previous month, and with a raft of new, lower-rate mortgage deals for first-time buyers announced this week, the trend may continue through the summer.
The new deals just launched include a two-year, fixed-rate mortgage from Santander at 4.59 per cent to 90 per cent loan-to-value (LTV) with no fee and £250 cashback, a 3.99 per cent, three-year fix from First Direct to 90 per cent LTV with £999 fee, and 5.49 per cent from Clydesdale and Yorkshire Bank for a three-year fix to 95 per cent LTV with no fee.
Andrew Hagger is an independent personal finance analyst from moneycomms.co.uk
Independent Partners: See how much you could save by switching credit cards. Compare now
elephant appealPrince William signs up for our charity appeal
elephant appealSo says man jailed for cutting off dead elephant's tusks
booksWe examine the best titles for teens
scienceResearchers teach border collie to understand sentences using more than 1,000 words
booksA Christmas story in six parts
travelWill high-value tourism help the workshops of this Renaissance city?
Geoffrey Macnab does not like the comedian's big screen debut
- 1 Top PR exec Justine Sacco under fire for sending racist tweet before flying to Africa
- 2 French pub fined €9,000 after customers returned empties to bar - because it's 'undeclared labour'
- 3 Sun will 'flip upside down' within weeks, says Nasa
- 4 The publisher who played with fire: the battle for control of Larsson's £30m legacy
- 5 Police seize possessions of rough sleepers in crackdown on homelessness
Tom Daley ‘is gay because his father died’ says UK evangelist
Iain Duncan Smith leaves Commons food banks debate early
David Cameron takes his biggest gamble yet as he gets tough on Europe over immigration
Kiss and yell: Italian protester charged with sexual assault after kissing riot police officer
Anachronistic and iniquitous, grammar schools are a blot on the British education system
Top PR exec Justine Sacco under fire for sending racist tweet before flying to Africa
- < Previous
- Next >
iJobs Money & Business
£59999 - £80001 per annum + Benefits: Pro-Recruitment Group: A Top 10 firm in ...
£50000 - £75000 per annum + benefits + bonus: Harrington Starr: Project Manage...
£60000 - £90000 per annum + benefits + bonus: Harrington Starr: Business Analy...
£Negotiable: Citifocus: High calibre individual with institutional client serv...
Day In a Page
A three-bedrrom flat with 2,733sq feet of living space, a beautiful private garden and 15 acres of communal grounds
A four-bedroom chalet bungalow with three bathrooms and a spacious garden, £525,000
A two-bedroom flat with an open plan kitchen and two balconies, close to Arsenal station
A six-bedroom farm house with separate, detached cottages and 371 acres of land
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A Grade II-listed home with six bedrooms, secluded landscaped gardens and views across Hadley Green
A Grade II-listed mansion with two apartments and a cottage, near Gretna Green
A three-bedroom Grade II-listed mews house with vaulted ceilings and roof garden
A spacious Grade II-listed family home with annexe and equestrian facilities among four acres of land in Itchingfield
A four-bedroom home with exposed brick walls and open fires in the picturesque village of Northill
A Grade II-listed property with five bedrooms and unique tower, overlooking Hastings Old Town
A charming five-bedroom detached family home, set within half an acre in Kew
A two-bedroom maisonette set on the top two floors of a period building, close to Kentish Town Tube.
Take advantage of the extra space provided by former stables and outbuildings at this five-bedroom farmhouse.
This three-bedroom Victorian terrace is near to Queen’s Road Peckham station, Nunhead station.
A five-bedroom modern house with terrace, swimming pool, Zen treehouse and large carp pond
An unexpected gem with four bedrooms, remarkable vaulted reception and a galleried study area
A five-bedroom house in one of Lymington's most sought after tree lined avenues, moments from the marinas and sailing clubs
A grand early 19th century B&B close to the historic harbour, with four en suite bedrooms
A four-bedroom, 17th century home with walled gardens, a landscaped terrace, cellar and open fires
A six-bedroom house with five bathrooms and four reception rooms spread over 4,000sq ft of luxury living space
A stunning three double-bedroom apartment with two decked terraces in the exclusive gated community, Bromyard House
A 10-bedroom period, family home amid beautiful surroundings in the centre of the Wentworth Estate in Longcross village
A stylish three-bedroom apartment with two bathrooms and private landscaped garden, moments from Fitzroy Square
A Grade II-listed Elizabethan barn with landscaped gardens, exposed elm beams and four bedrooms, all with lovely views
A six-bedroom family home, dating back to 1280 with four reception rooms, barn, swimming pool and tennis courts in Harwell
A spacious two-bedroom flat, refurbished to a very high standard with private landscaped garden, close to Kentish Town station
An exceptional two-bedroom apartment with balcony and underground parking in the centre of Richmond
A one-bedroom, luxury, duplex apartment in the grand landmark building, Imperial Hall
Run a fabulous boutique shop, live above it in a one-bedroom flat and let a second one-bedroom flat that comes part and parcel
A Grade-II listed, thatched cottage in Hundleby village, with five bedrooms, a coach house and three and a half acres
A spacious two-bedroom flat in the heart of Hoxton Square with wooden floors and roof terrace
A five-bedroom family home with stunning pool and gym complex set among two acres of land
A six-bedroom period house with heated swimming pool and a separate two-bedroom annexe cottage in Townlake, £795,000
A spacious and contemporary two-bedroom flat arranged over three floors, with garden patio close to St George Square, £600,000
A one-bedroom flat in a beautiful Regency building opposite the beach in Kemp Town, £190,000
A two-bedroom flat with London skyline views close to Surrey Quays. £395,000.
A seven-storey tower with three bedrooms and a stunning roof terrace. Guide price: £850,000.
A 16-bedroom country pile with nine reception rooms, four self-contained flats and a 13th century Peel Tower. £850,000.
A classic six-bedroom Victorian Manse house 10 miles from Edinburgh. £495,000.