Product category:
Banking / credit / debt
News Release from: Moneysupermarket.com | Subject: Banking
Edited by the Insidemoneytalk Editorial
Team on 21 September 2007
moneysupermarket.com comments on first
direct
Commenting on first direct's move to stop paying interest on current accounts and its introduction of a 'sweeping' facility for customers to transfer a set amount of cash into a savings account,
Kevin Mountford, head of savings at price comparison website moneysupermarket.com, said: "The product design makes sense and the 'sweeping' option could encourage people to save on a more meaningful level rather than in dribs and drabs, so thumbs-up for that" ""But if you look more closely at the detail, many rival current account providers pay a good in-credit interest rate and first direct's designated savings account, the Everyday e-Saver, is way behind the pace at a paltry 5.5 per cent AER
This article was originally published on Insidemoneytalk on 21 Feb 2007 at 8.00am (UK)
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It might be a better idea for consumers to set up their own direct debit from their current account to a savings provider offering a much higher interest rate.
There is certainly plenty of choice.
Alliance and Leicester, for example, pays 6.5 per cent on current account balances of up to £2,500, 6.3 per cent on its easy access savings and 12 per cent on its regular saver.
"first direct has a solid reputation for customer service, but I wonder if this only applies to current account holders rather than savers".
"Having said that, I do like the overdraft buffer - first direct has a customer base that is likely to dip into their overdraft by accident so it's good they will escape punitive fines".
"It can't ignore the important role service plays in the customer's decision making process, so it is good to see first direct putting its money where its mouth is with this guarantee.".
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