Show us some interest

By HELEN MONKS
Updated:

 

WHICH? is re-stating its demand that the big four banks pay personal customers interest on their current accounts as well as for small business accounts.

While The Treasury has outlined an agreement with Barclays, HSBC, Lloyds TSB and Royal Bank of Scotland/NatWest to pay interest on current accounts, the banks have so far refused to offer personal customers the same terms.

It was in May that Which? first challenged the big four to end what it describes as the £500 million rip-off. It wants the big four to pay their 25 million ordinary customers 2% interest on all credit balances and only charge 10% on overdrafts.

Which? estimates that if 70% of the big four's customers switched to the best accounts available they could save themselves £500m.

Big banks pay a miserly 0.1% interest on current account credit balances, compared to the 2.08% available at First Direct.

And although the best overdraft rates are less then 9%, the big four charge up to twice this.

Ashleye Sharpe, Which? head of money research, says: 'We welcome the news that the big four banks have at long last agreed to improve things for small businesses. However, this long overdue announcement will re-awaken the anger of the 25 million big four customers who currently receive virtually no interest on their current accounts.

'If the banks can act for small businesses then surely they can do so for ordinary consumers.'

The banks are yet to respond to Which's refreshed demands, but said back in May that they compete on service not on paying interest and had no plans offer their personal customers improved terms.

Small businesses will get better terms from the big four no later than January 1 2003.

Which? Is encouraging consumers who want to protest against their treatment by switching through its online service at www.switchwithwhich.co.uk.

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