Alliance & Leicester is offering people a £100 incentive to switch to two of its Premier current account offerings.
The deal applies on all applications from 5 January, with the money credited to people within four months of opening either a Premier or a Premier 50 current account. Applications can be made online, by telephone or in branch.
Alliance & Leicester says the £100 bonus is just one of a range of incentives it will be offering to encourage people to review their finances. Its research shows that two-thirds of people have not switched current accounts in the last decade.
Andy Muddimer, current account manager at Alliance & Leicester, says: "After what is likely to be an expensive Christmas for many people, the new year is an ideal time for people to start sorting out their finances, and in particular to take a closer look at their current account.
“This is a win-win for customers; they get a market-leading current account to make their money stretch further and they also get to pocket £100 - not bad when money might be tight."
So, is it worth switching to one of Alliance & Leicester’s Premier current accounts?
Its standard Premier account is free, and includes annual multi-trip European travel insurance worth up to £60. The account itself pays 1% AER on balances up to £2,500, or just 0.10% on balances over that amount.
If you tend to go into the red, then this account offers interest-free arranged overdrafts (up to £2,500) for the first 12 months. However, after this time you will be charged 50p a day (up to £5 a month) if you go overdrawn.
The other account eligible for the £100 incentive, is Alliance & Leicester’s Premier 50. This account pays a 6.5% AER fixed-rate rate of interest on balances up to £2,500 for one-year, at which point it reverts to 1% below the Bank of England base rate. If you deposit more than £2,500 then the interest rate will drop to just 0.1% AER.
Again, this account offers an interest-free overdraft facility for 12 months. However, there is a monthly fee of £10 and this account is only available to people aged over 50.
Alliance & Leicester offers two other Premier current accounts that, while not included in the £100 incentive, are competitive. The first is its Premier Direct account which pays a fixed-rate of 6.5% AER for 12 months on balances up to £2,500 and offers an interest-free overdraft for 12 months.
The second is its Premier 21 account for people aged between 16 and 20, which pays an impressive fixed-rate of 8% AER for 12 months on balances up to £1,000.
Should you switch?
Reviewing your current account is a good way to kick off the year – numerous pieces of research show that this is one financial product few people change on a regular basis. So whether you could earn more interest on your balance, or pay less on your overdraft, it is worth having a look around the market to see what else is out there.
Louise Bond, personal finance expert at uSwitch.com, says Alliance & Leicester’s £100 bonus is a good incentive for people to shop around - but add that even without this financial motive its Premier accounts are worth considering.
“For some time Alliance & Leicester has offered one of the better accounts on the high street with its Premier current account, and this £100 switching incentive, at a time when every penny counts, could prove a hit with many consumers,” Bond says.
If you are looking for a current account that pays a decent amount of interest on your balance, then Alliance & Leicester comes out well when compared to other deals on the market:
|In-credit interest||Interest on overdraft|
|6.5% AER fixed for one-year*||0% AER|
|6.5% AER fixed for one-year*||0% AER|
|Lloyds TSB||5% AER**||18.9% AER|
Gold with Vantage
|5% AER**||16.8% AER|
Platinum with Vantage
|5% AER**||10.4% AER|
|Source: uSwitch.com 05/01/09|
* After one-year this reverts to 1% under the Bank of England base rate.
Balances over £2,5000 earn 0.1% AER variable.
** Rates are tiered and variable. To earn 5% AER your balance must be between
£5,000 and £7,000. Balances under £1,000 earn 0.1% AER.