The Post Office is bringing out its first ever current account.
The Post Office is joining the current account market, launching its new account in a series of branches this spring.
Very little information has been released at the moment, but it should be an interesting launch and is likely to challenge the high street banks.
In the first instance the account will just be available in a few branches, though it will be fully rolled out across the country in 2014.
Post Office current account
The Post Office already offers a wide range of financial products, such as travel insurance and savings accounts, which can be accessed via the Post Office’s 11,500 branch network.
The only thing which has been said about the new current account is that it will focus on simplicity, transparency and good value for money, so basically nothing so far. Despite the lack of details, what is clear is that it’ll be a welcome challenge to the accounts already on offer.
The Post Office has around three million existing customers. Those who are interested can register on the website for more details when they are released.
Last year Marks and Spencer launched a paid-for current account and hopefully this one from the Post Office will shake things up even more.
How does it compare?
[SPOTLIGHT]The Post Office is already known for being a trusted brand, but it faces stiff competition from the likes of Nationwide and Santander, which currently have the market-leading accounts.
These two providers have upped their game in the last few months and added interest onto credit balances making them a tempting option when looking at the dismal savings rates around.
The Nationwide account pays out 5% on balances up to £2,500, while the Santander 123 account pays out up to 3% on balances up to £20,000 as well as paying cashback on household spending.
Last year’s offering from M&S, another new entrant to the market, was a positive sign but the account is largely focused on M&S customers and not the mass market.
Our comparison tables give a full view of the current account market, but here I’ve picked out four of the best current accounts around.
|
Provider |
Account |
Fee |
Interest (APR) |
|
Nationwide BS |
FlexDirect Current Account |
N/A |
5% for 12 months |
|
Halifax |
Reward Current Account |
N/A |
£5 per month |
|
Santander |
£2 a month |
Up to 3% |
|
|
Lloyds TSB |
Classic Current Account with Vantage |
N/A |
Up to 3% |
What can we expect from the Post Office?
Many current accounts around at the moment are paid-for but I’d like to see the Post Office break this mould and launch a free account. It would also be good if it were to offer interest on in-credit balances, or even a linked savings account at a competitive or even market-leading rate.
An account paying a decent rate which customers don’t need to shell out for would be a welcome change to the market. Access to better rates would be sure to tempt some to switch to the Post Office.
Switching current accounts
Switching your current account is an easy process and a good way to make sure you’re getting the right kind of benefits with your account. However, many people are put off switching because they wrongly assume it’ll be stressful and take a long time.
New customers are generally offered the best deals. Therefore when you join a new bank there is a good chance you’ll be offered some freebies and discounted products.
Both banks will work together during the switching process so you don’t have to do much. Our article – How to switch current accounts – gives a full breakdown of the process.
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