FlexAccount rate creates buzz

Thursday, January 19, 2006

Nationwide's announcement that it is to raise the interest rate on its current account from April 1st 2006 has been greeted with a high level of feedback from various sources.

The interest rate on the FlexAccount is set to increase to 4.25 per cent AER, which seems a promising deal for customers.

Stuart Bernau, Nationwide's executive director, said: "The current account market is changing and Nationwide is delighted to offer an exceptional rate which is available to both new and existing customers."

Alliance and Leicester have commented on the Nationwide news, saying that interest rates offered by some banks need to be put under the spotlight.

"We welcome any initiatives that draw attention to the poor value offered by the Big Four banks," said Simon Ripton, current account manager at Alliance and Leicester.

Moneyfacts and uSwitch, both product comparison websites, have also commented on the FlexiAccount, with uSwitch hoping the account will act as a wake up call to other banks.

Andrew Haggar from Moneyfacts is not so sure this will be the case, however: "Whilst a credit interest rate of 4.25 per cent AER is not to be sniffed at, is it enough to break through the 'wall of lethargy' and encourage the thousands of consumers to ditch their existing current provider, which in many cases will be offering rates as low as a paltry 0.1 per cent?"

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