Money News
first direct is to reshape its current account and savings products on November 1st to help customers earn more money on their savings rather than 'small change' on their current account.
Following extensive customer research, the bank is to stop paying interest on its current accounts and instead reinvest in what the research showed customers actually wanted: a better deal on savings and overdrafts. The bank will also offer all customers free red alerts by text message to help them avoid going overdrawn or over their overdraft limit.
first direct currently has two current accounts, Cheque account and Bank account, which pay 0.10% and 2.00% AER respectively. Its customers are split evenly between the two accounts. From November 1st, first direct will merge these accounts into the 1st Account.
The new account won't pay credit interest but in return the bank will give a new no-strings instant access savings account, called Everyday e-Saver, paying 5.5% AER. Customers can set up an automatic monthly sweep to move money from their 1st Account to their Everyday e-Saver, to maximise the amount they earn from their savings.
Also to be made available is a new Regular Savings account paying 8.00% AER fixed for a year with customers allowed to save between £25 and £300 a month.
Meanwhile, for overdrafts, where applicable, the first £250 of overdraft will be interest-free.
The bank is also introducing a new incentive to customers joining it. Any new customer opening a 1st Account from November 1st who is not wholly satisfied after six months can claim £100. first direct's easyswitch team will help them move to another provider. The service guarantee replaces the bank's previous joining incentives.
20 September 2007 © Moneyextra.com
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