Whilst the banking industry and consumers await the ruling of the judge in the High Court case over bank charges, banks are busy trying to attract new customers by raising the interest rates that are offered on current accounts, starting a current account war within the industry.
A number of banks have increased their current account interest rates by a considerable amount in the hope of attracting new custom. However, consumers are being warned to make sure that they read the small print, as in some cases – such as with the Alliance and Leicester and HSBC – the higher rate only applied to a certain level of the balance, and the rest accrues interest at the standard low rate.
Customers are also urged to remember that things could chance once the presiding judge in the High Court case reveals his ruling. Most experts think that if the judge does rule in favour of the Office of Fair Trading, and bank charges are abolished or dramatically reduced, banks will start charging a standard monthly fee to all current account customers, and this could result in a mass of account switching, as consumers try and avoid these charges.
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