Coventry current account offers 6.35% up to £250K
Monday, 01 Oct 2007 17:56
Coventry Building Society is offering a current account with an interest rate of 6.35 per cent.
As well as offering one of the highest rates on the market, the Coventry First current account offers the higher rate of interest on balances up to £250,000 – while many competitors only offer higher rates on balances up to £2,500.
Rachel Haworth, head of marketing at the Coventry said: "We believe customers could be misled by headline rates and a significant amount of account switching is being carried out, only for the actual return on their entire balance to be considerably less than they were expecting.
"The rate earned on a significant portion of each customer's balance can be as low as 0.10 per cent, far less than the headline rate being advertised.
"As a result, customers moving to earn a better return on their current account may potentially end up switching to the wrong account."
"For example, a customer switching to a top-rated account, and keeping a steady balance of £2,500 deposited throughout the year, will indeed earn a good rate of interest. However, this is not how many people operate current accounts.
"Customers who have their salaries paid into their current account will have a significant balance at the start of the month (even more so in the case of joint accounts) and therefore find a sizeable proportion of their money earning almost no interest at all. This is made worse if the headline rate encourages them to leave any amount of savings in the account."
The Coventry First offers a standard current account features – such as a Visa debit card, direct debits, and standing orders – as well as an interest-free £250 overdraft. The minimum funding requirement for the account is £1,000 per month.