Banking customers saving money given high-interest current account advice

Tue, 27 Mar 2007

People looking to start saving money have been given an overview of the present vogue for high-interest current accounts by a financing expert.

In recent months, financial services providers such as Halifax, Alliance & Leicester and Abbey have all launched current accounts that seemingly double as savings accounts, offering annual equivalent rate interest in excess of six per cent.

However, Andrew Hagger, head of news and press at financing website Moneyfacts.co.uk, pointed out that all three impose upper limits on credit balances eligible for high interest.

With Halifax, for example, the first £2,500 qualifies for the headline interest rate but this drops to 0.1 per cent thereafter.

"People are obviously drawn by some very seductive rates that are being offered but they really must check that these high rates apply to all the money in the account," he contested.

As a result, he suggested that many people aiming to start saving money may wish to keep their current and savings accounts separate.

Alternatively, people looking to boost their long term savings may wish to consider taking out buy to let mortgages or arranging investments.

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