Meet B: the new digital bank from Clydesdale and Yorkshire
The latest digital bank and banking app, B, launched earlier this week, promising to “take the fear out of finance” with a range of tools and features to make managing money easier.
B users can sign up for a current account paying 0.5% interest on the first £2,000, and an instant access savings account paying 1% interest. Customers can also manage other Clydesdale and Yorkshire Bank accounts through the app.
Available on both Apple and Android devices, B lets customers:
- Set up separate savings pots for different goals.
- Automatically sweep any money that’s left in a current account into a savings account at the end of the month, which pays 1% interest.
- Use budgeting tools to show if their current account balance is enough to cover their typical monthly spend.
- Link offset mortgages with Clydesdale or Yorkshire Bank to their B current or instant savings account to cut down the interest they owe.
The app is free to use for the first year, but then costs £2 per month.
The creators at Yorkshire and Clydesdale Banks claim the inspiration for the app came from lifestyle and health apps, rather than the banking sector, and customers have been involved throughout the two-year development process.
Helen Page, director at Clydesdale and Yorkshire Bank, says: “It was crystal clear from our research that people want something a bit different. Customers said they wanted their bank to take the hassle out of money and make life a bit easier.”
Unlike the recently launched Atom Bank, and soon-to-arrive Mondo Bank, which operate online only, B customers will still be able bank in branch or over the phone through branches of Yorkshire or Clydesdale Banks.
Remember, in the eyes of the regulator, B, Clydesdale Bank and Yorkshire Bank are all one institution, so your £75,000 protection from the Financial Services Compensation Scheme is shared between all three. If you put £50,000 in each, only £75,000 of the total amount would be protected, not £150,000.
How do the current account compare?
If you get the B current account, which comes with 0.5% interest on balances of up to £2,000, planned overdraft use costs £6 per month, plus 12.5% interest, though there is a two-day grace period for people who briefly go overdrawn. Unauthorised overdraft use costs £6 per day.
It’s a fairly good all-rounder, but there are better accounts if you’re looking for cheap overdrafts or a high interest rate.
First Direct has the cheapest overdraft, with £250 interest free.
TSB pays 5% interest on balances up to £2,000. Nationwide’s Flex Direct Account pays 5% interest on balances up to £2,500, but only for the first year.
For larger balances, Santander pays 3% on balances between £3,000 and £20,000, 2% on balances between £2000 and £3,000 and 1% on balances between £1,000 and £2,000. It also pays cashback on many household bills if you pay by direct debit, but it does have a £5 monthly fee.
- See our best current accounts guide.
An overdraft is an agreement with your bank that authorises you to withdraw more funds from your account than you have deposited in it. Many banks charge for this privilege either as a fixed fee or charge interest on the money overdrawn at a special high rate. Some banks charge a fee and interest. And other banks offer a free overdraft but impose very high charges for exceeding the agreed limit of your overdraft.
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.