From today, Abbey Banking is offering people who switch to its preferred overdraft rate account (PODR)(1),
an interest free overdraft for 12 months. After a year, customers
revert to an advance overdraft rate of 12.9 per cent – one of the
lowest on the market.
The 12 months interest free period would save someone who had a typical size overdraft (of £350), who switched to Abbey’s PODR account, £65.(2)
Last year Abbey introduced an 8 per cent rate for switchers to its preferred in-credit rate account. This pays 8 per cent on balances of up to £2,500 in the first year to switchers and reverts to the standard PICR rate, which is 2.5 per cent (25 times the interest paid by most major providers), thereafter.
Steve Shore, Abbey Director of Banking commented: “Abbey Banking now offers market-leading bank accounts to suit customers at both ends of the spectrum. Whether they are making regular use of their overdraft or they want to benefit from a high rate of interest on in-credit balances, customers can be better off with Abbey.
“The 12 months interest free period makes us market leading for people with advance overdrafts. Not only is it one of the longest interest free periods in the market, with Abbey, customers also revert to one of the lowest ongoing advance overdraft rates in the market for fee-free current account deals.”
Samantha Owens Head of Personal Finance at Moneyfacts.co.uk comments: “Over the past few months we have seen borrowing costs increasing across all sectors of the personal finance market. It is good to see a current account provider buck the trend by offering a competitive deal to those looking to switch their current account.”
1) Abbey has two current account options – one for people who prefer to run their account in-credit (PICR) and one for those who tend to operate in their advance overdraft (PODR).
2) This is based on an average balance of £350 compared to HSBC, Lloyds TSB and NatWest.