Even though the Bank of England base rate remains at an all-time low, the current account market is very much alive and kicking with Alliance & Leicester (A&L) and Abbey having increased the rates on some of their current accounts.
A&L's Premier Direct Account now pays an impressive 6 per cent on balances in-credit – up from 5 per cent. This rate is fixed for 12 months on balances up to £2,500 – it drops to 1 per cent after the first year. Balances above £2,500 earn just 0.1 per cent.
Someone with an average balance of £2,000 in their current account would earn £120 interest over the first year with this account.
As well as offering a market-leading in-credit rate, the Premier Direct account also has a very competitive overdraft facility. An interest-free overdraft is available for the first 12 months up to £2,000. Thereafter, customers are charged 50 per day for being overdrawn – this is capped at £5 per month.
It is an online account, so there is no branch access.