Money Insider: Unauthorised bank charges need fixing

A report issued this week showed that authorised overdraft rates have hit a 10-year high. However, before we get carried away with the "shock horror" headlines, the situation needs to be put into perspective.

For example, if you take the case of someone with an agreed overdraft being charged at a market average of 14 per cent and they are £500 overdrawn for 15 days each month, they will pay interest charges of £2.87 per month. If their interest rate was then increased by a further 2 per cent it would mean them having to pay just an extra 41 pence per month.

However, these charges pale into insignificance when compared to the unauthorised charging structures employed by some banks, and this is still the main bugbear. No doubt it is one of the major reasons behind a growing number of customer complaints.

Unauthorised charging is definitely an area where further investigation is needed, particularly when you realise that a £50 unauthorised overdraft for just three days can cost a customer up to £60 for what is a short-term and fairly minor financial indiscretion

With Vince Cable responsible for banking in the new coalition cabinet, maybe there's renewed hope that these unfair and disproportionate levels of charging will be reviewed.

Barclays to reduce rate on best-buy Isa deal

if you're still making up your mind as to where to put your cash Isa money for this tax year, you'll need to act quickly if you want to take advantage of the market leading deal from Barclays.

The Golden Isa 2 pays 3.1 per cent AER, including a fixed 1 per cent introductory bonus for 12 months, and while it doesn't allow you to transfer in your tax-free savings balances from past years, it is an excellent rate.

Hats off to Barclays for giving notice that the rate is to be reduced. Far too often we see products withdrawn or rates cut without any warning. The 3.1 per cent version of the Isa will be available until 1 June and is available to everyone.

Andy Gray, head of mortgages and savings at Barclays, said: "We have maintained our best-buy rates throughout the peak Isa season and we will continue to do so for the remainder of this month, as we know that this is still a popular time for customers thinking about opening Isas."

From 2 June, those buying the Golden Isa 2 will not get the 1 per cent bonus and will receive a core interest rate of 2.08 per cent AER.

First-time buyers need a second opinion

We are finally starting to see renewed activity in the mortgage market for first-time buyers, with competitive new fixed rate deals being launched by Post Office, Britannia and Co-operative Bank in the last two weeks.

It is, however, important for all first-time buyers to speak to a mortgage professional in order to understand exactly how much a mortgage will cost of the full term of the deal.

This need is highlighted by less straightforward products that may look appealing at face value. For example, this week Cheltenham & Gloucester launched a 90 per cent LTV, two-year, stepped rate tracker, and while base rate minus 0.01 per cent until 31 December 2010 looks a fantastic deal, the rate then jumps dramatically to base plus 5.49 per cent.

Lock your funds away with Coventry

Consumers are still struggling to find a reasonable interest rate on their savings with the finest rates usually only available if you're prepared to lock your funds away for a fixed term.

For a one-year, fixed-rate bond, you will be doing well to find an account paying 3 per cent, so this new postal savings account from Coventry Building Society may be a more suitable option for some savers.

The 1st Class Postal (Issue 5) was launched on Wednesday and pays 3 per cent, including a 1 per cent bonus for the first year. You'll need a minimum of £1,000 to open the account and are permitted four penalty-free withdrawals per year. However be aware that the minimum withdrawal amount is £1,000.

Whilst this account won't be right for everyone, it does offer a good rate of interest coupled with the flexibility of penalty-free access, something you wouldn't get with a fixed-rate bond. If you plump for this account, don't forget to make a note in your diary to review how your rate stacks up against other products once your 1 per cent bonus expires in 12 months.

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

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

News
The slice of Prince Charles and Princess Diana's wedding cake and the original box from 29 July 1981
newsPiece of Charles and Diana's wedding cake sold at auction in US
News
James Argent from Towie is missing, police say
newsTV star had been reported missing
Arts and Entertainment
Gregg Wallace in Summer's Supermarket Secrets
tv All of this year's 15 contestants have now been named
Arts and Entertainment
Inside the gallery at Frederick Bremer School in Walthamstow
tvSimon Usborne goes behind the scenes to watch the latest series
PROMOTED VIDEO
Life and Style
A picture taken on January 12, 2011 shows sex shops at the Paris district of Pigalle.
newsThe industry's trade body issued the moratorium on Friday
News
Winchester College Football (universally known as Winkies) is designed to make athletic skill all but irrelevant
Life...arcane public school games explained
Arts and Entertainment
Could we see Iain back in the Bake Off tent next week?
tv Contestant teased Newsnight viewers on potential reappearance
Life and Style
Silvia says of her famous creation: 'I never stopped wearing it. Because I like to wear things when they are off the radar'
fashionThe fashion house celebrated fifteen years of the punchy pouch with a weighty tome
News
i100(and it's got nothing to do with the Great British Bake Off)
News
Angelina Jolie with her father Jon Voight
peopleAsked whether he was upset not to be invited, he responded by saying he was busy with the Emmy Awards
News
Bill Kerr has died aged 92
peopleBill Kerr appeared in Hancock’s Half Hour and later worked alongside Spike Milligan and Peter Sellers
News
news It's not just the world that's a mess at the moment...
Sport
footballPremiership preview: All the talking points ahead of this weekend's matches
News
Keira Knightley poses topless for a special September The Photographer's issue of Interview Magazine, out now
people
Voices
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
Arts and Entertainment
Cara Delevingne made her acting debut in Anna Karenina in 2012
film Cara Delevingne 'in talks' to star in Zoolander sequel
News
i100
Sport
Mario Balotelli pictured in his Liverpool shirt for the first time
football
Life and Style
tech
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Financial Technical Consultant (C++, C#, Finance, MSc, PhD)

    £50000 per annum: Harrington Starr: Financial Technical Consultant (C++, C#, F...

    Data Scientist (SQL,Data mining, data modelling, PHD, AI)

    £50000 - £80000 per annum + benefits+bonus+package: Harrington Starr: Data Sci...

    SAS Business Analyst - Credit Risk - Retail Banking

    £450 - £500 per day: Orgtel: SAS Business Analyst, London, Banking, Credit Ris...

    Project Manager - Pensions

    £32000 - £38000 Per Annum Bonus, Life Insurance + Other Benefits: Clearwater P...

    Day In a Page

    Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

    The phoney war is over

    Russian troops and armour pour into Ukraine
    Potatoes could be off the menu as crop pests threaten UK

    Potatoes could be off the menu as crop pests threaten UK

    The world’s entire food system is under attack - and Britain is most at risk, according to a new study
    Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

    Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

    Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
    From Mozart to Orson Welles: Creative geniuses who peaked too soon

    Creative geniuses who peaked too soon

    After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
    Caught in the crossfire of a cyber Cold War

    Caught in the crossfire of a cyber Cold War

    Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
    Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

    Salomé: A head for seduction

    Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
    From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

    British Library celebrates all things Gothic

    Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
    The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

    Is the Hard Rock Café worth fighting for?

    The restaurant chain's owners are currently embroiled in a bitter legal dispute
    Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

    In search of Caribbean soul food

    Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
    11 best face powders

    11 best face powders

    Sweep away shiny skin with our pick of the best pressed and loose powder bases
    England vs Norway: Roy Hodgson's hands tied by exploding top flight

    Roy Hodgson's hands tied by exploding top flight

    Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
    Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

    Di Maria and Ronaldo: A tale of two Manchester United No 7s

    They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
    Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

    Robert Fisk: No victory for Israel despite weeks of devastation

    Palestinians have won: they are still in Gaza, and Hamas is still there
    Mary Beard writes character reference for Twitter troll who called her a 'slut'

    Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

    The Cambridge University classicist even wrote the student a character reference
    America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

    America’s new apartheid

    Prosperous white districts are choosing to break away from black cities and go it alone