Rock triggers rate battle by Finance News Bulletin

Published: 13/12/07

All era are London time Search News in the FTcom siteSearchSearch Quotes in the FTcom siteQuotesYOUR MONEY Your bankingBreadcrumb follow navigation:FT house > Your money > Your bankingServicesThe turmoil surrounding the lender Northern Rock has had a damaging result on the reputation of high street banks, analysts speak And in its wake, scores of customers are shopping around for better services and deposit rates

But if you are looking to go after suit and move financial records this month, remember that banks tend to alter their rates in subtle habits to meet year-end monetary goals As long as you are careful and realise that the headline rates on offer are not probable to last, this could labor to your advantageThis Christmas season, lenders are keen to transport in more retail deposits as the credit crisis has increased the price of borrowing in the wholesale markets“Over the last 18 months, the present account market has changed shape

The range of packaged financial records has grown rapidly, and the repeated rate battle has stepped up a gear every few months, with rates climbing and novel players joining,” says Esther James, personal finance specialist at MoneyfactscoukWith interest rates on the rise, the price of borrowing is higher for banks so, while lenders tend to misplace, savers can benefit as deposit rates for both investments and current accounts are now as high as 6

5 per centTwo banks that stand out for contribution attractive current accounts are Abbey and Alliance & Leicester Abbey is now offering an 8 per cent interest speed on its current account for 12 months if you transfer a balance of as much as £2,500 from another provider At the same time, Alliance & Leicester offers a guaranteed AER of 6

5 per cent on balances of up to £2,500 and a linked savings explanation, which pays 6 per cent on balances up to £50,000 There is no charge for an overdraft – which is incomplete to £2,500 – for a year After that, the price is 50p per daylight hoursNational Savings & Investment, meanwhile, offers an tempting 6

3 per cent rate on its mini-cash Isa, which allows instant access, while ICICI Bank’s online HiSave savings account’s AER is 641 per centAt the top end of the market is West Bromwich building civilization, which offers a rate of 654 per cent if you deposit a minimum of £1,000

The outcry over Northern astound can also be seen as another sign of the power struggle between customers and banksIn new months, customers have rebelled against “unfair” bank charges and expressed concerns that the recent break in data security by the government – which resulted in the defeat of millions of bank account particulars – might have some fallout in the sell banking sectorFrom the year to the end of September 2007, the Financial Ombudsman conventional 57,624 complaints, more than 250 per cent higher than the figure of criticisms received the year beforeMedia notice on the relationship between banks and customers is likely to remain intense when next month the case for validity of banking default charges brought by the Office of pale Trading (OFT) will be heard in the far above the ground Court

The OFT took up the case of unauthorised bank charges after thousands of consumers in progress applying for rebates and the biggest banks refunded hundreds of millions in charges It is investigating whether the charges levied are fair and commentators have supposed the case could lead to banks ending free bankingBanls may now seem to make radical changes, to improve relations with their customers in prospect A survey on European banks by the consultancy Coleman-Parkes – set to be free next week – claims that what consumers across the continent want, in addition to low service fees and high put rates, is banks that are “informal” and individual

“Failure to move to a more personalised approach will restrict the enlargement of the banks and unenthusiastically impact customer service,” the study concludesCopyright The Financial Times Limited 2007astound working overtime on bid shortlist - Nov-22Rock shares fall after Darling pledge - Nov-20Rock rescuers danger ire of shareholders - Nov-20More in this sectionBlogsBrussels BlogCharles PretzlikClive CrookDear LucyEconomists’ ForumEnergy FilterJohn GapperGideon RachmanTech BlogThe in secret EconomistWestminster BlogWillem Buiter’s MavereconRegional pagesLatin American agendaChinaIndiaBrusselsInteractivePodcastsDebates & pollsAsk the expertMarkets Q&AJobs and classifiedsBusiness for saleContracts & tendersJobs Search Type your search criteria below:* Minimum holdup 15 minutesAll times are London timeFT HomeSite mapContact usHelpAdvertise with the FTMedia centreStudent offersFT ConferencesFT investigate CentreFT SyndicationCorporate subscriptionsFT GroupPartner sites: Chinese FTcomLes EchosFT DeutschlandExpansionInvestors ChronicleExec-Appointmentscom© Copyright The monetary Times Ltd 2007

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