Best and worst: Current Accounts

Click to follow
The Independent Online
LAST week, Woolwich Building Society increased the rate of interest on its current account, raising the possibility that other banks and building societies might follow suit.

Account providers range between 0.2 per cent and 0.75 per cent on opening balances. In many cases that is all a saver will get. With some building societies, savers who keep their accounts several hundred or even a few thousand pounds in credit will receive more.

For those with regular balances of pounds 500 or more, Woolwich Building Society is a worthwhile option. Its current account pays 1.15 per cent on initial balances, but this rises to 3.5 per cent above the pounds 500 limit. Interest is calculated on a daily basis but credited to the account annually.

At the moment, the best rate on small amounts is Caledonian Bank. However, the bank only pays interest yearly and its rate is not tiered - you get the same rate no matter how much you keep in the account.

Competitors of the Woolwich seemed relatively unconcerned about its move. An Abbey National spokesman said: 'We believe we are competitive. People use our current account for a range of reasons, including low charges.

'If they really want a higher return on their savings, particularly on larger amounts, then we always suggest that they open one of our many other accounts, which offer far better rates of interest.'

A Midland Bank spokesman said: 'Our Orchard Account pays 0.5 per cent across the board. But savers with more money in their account would be better off with our Meridian Account, which has a stepped rate of 1 per cent for savings above pounds 2,000, rising to 2.96 per cent for sums above pounds 10,000.'

Several banks pointed out that their current account customers are primarily interested in the wider range of services they receive rather than just the interest they get on their money.

------------------------------------------------------------------------ CURRENT ACCOUNTS ------------------------------------------------------------------------ % The best 1 Caledonian Bank 4.75 2 Woolwich Building Society 1.15 3 Halifax Building Society 0.75 4 Northern Building Society 0.50 5 Britannia Building Society 0.40 The worst 44 Royal Bank of Scotland 0.25 45 National Westminster Bank 0.25 46 Co-operative Bank 0.25 47 First Direct 0.20 48 Abbey National 0.20 ------------------------------------------------------------------------ Figures are for opening balances of pounds 1. Source: Moneyfacts (0692 500765). ------------------------------------------------------------------------