Switching incentives back

Although many current account holders remain loyal to their banks, customers should take advantage of a range of offers designed to tempt them away from their present provider, according to the Moneyfacts website.

The advice comes as Halifax announced that current account holders who switch to its current accounts will be given £100.

While some banks have failed to pass on the interest rate rises to their savings account customers and others have raised the rate on authorised overdraft, others are offering incentives to switchers.

Both Halifax and First Direct offer to pay £100 cash into the accounts of people who take out a current account with them. Meanwhile, Alliance & Leicester runs an recommend a friend program where both recommender and their friend receive £40.

While customers should always make sure that the account they are switching to is suitable to them, it is worth noting that current accounts by both Halifax and Alliance & Leicester make the Moneyfacts Best Buy charts for credit interest rates and overdraft interest rates.

Banks are willing to compete for customers because current accounts are seen as gateway products which could lead to customers taking out loans or credit cards with their main financial provider.