'B': new online banking tool from Clydesdale and Yorkshire Banks

Banking and Borrowing

Updated on 11 May 2016 | 0 Comments

We see how the latest banking app stacks up and whether it’s worth going for.

Clydesdale and Yorkshire Banks have launched a new only and mobile-only banking service dubbed ‘B’.

It’s the latest ‘challenger bank’ to offer everyday banking and saving through an app on your phone, following the likes of Atom Bank which launched earlier this year.

So how does it stack up to the competition and is it worth going for?

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What you get with B

B comes with a current account and a linked savings account that you manage using an app available for both Android and Apple devices.

The B Current Account pays 0.5% interest on balances up to £2,000, while the easy access savings account pays 1%.

With the current account you also get a contactless debit card, which you can use to withdraw up to £500 a day and planned overdrafts are available for a competitive 12.5% AER.

If you accidentally go overdrawn or exceed a planned overdraft limit you get a two-day grace period each calendar month before any fees are charged. There is a £6 a month fee for exceeding a planned borrowing limit or a £6 a day fee for unplanned borrowing – fees are capped at £100.

The account also comes packed with features that give you a better picture of how you spend and save as well as tools to help you make your money go further.

You can tag your spending into different categories to help you see where your money goes each month allowing you to budget better. You can also set up savings pots that will help keep you on track with your goals.  

Another feature is ‘Sweeps’, which can be set up to automatically move money from your B savings account into your current account when your balance reaches a certain level, so you can avoid any unplanned borrowing.

The account is free to use, but only for 12 months. After that there is a £2 monthly ‘maintenance fee’ to consider.

Balances up to £75,000 in the current account and savings account will be protected by the Financial Services Compensation Scheme. However, you should bear in mind that this is under the Clydesdale Bank PLC licence so if you have money with the brand elsewhere you need to make sure altogether the total across the accounts don’t exceed the limit.

How B compares

While it’s encouraging to see a new current account paying interest on balances, you can get a much better rate than 0.5% with some of the bigger players.

The Nationwide FlexDirect account offers 5% interest on balances up to £2,500 for a year, while the TSB Classic Plus offers 5% interest on balances up to £2,000 for as long as you have the account. Those with larger balances between £3,000 and £20,000 can earn 3% with Santander’s 123 Current Account (although there's a £5 monthly fee).

Also while the interest you pay on the B Current Account overdraft is competitive, the First Direct 1st Account comes with a £250 interest free overdraft which might better suit you.

Meanwhile the instant access savings rate of 1% isn’t very compelling as you can get a better rate with the RCI Bank Freedom Savings Account, which currently pays 1.45%.

Is B worth going for?

While the B Current Account hasn’t quite got the market leading deals those shopping for a current account and savings account may be looking for, it may win fans for the range of features it offers to help people be better with their money.

With no minimum funding requirement to open the account and no need to move across any direct debits to access the features there's no harm giving it a go to see whether it will be worth the move and 12 months down the line the £2 fee.

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