HOWZAT

Current accounts

Banks have slashed their interest rates on in-credit balances following three cuts by the Bank of England, but have in turn raised overdraft rates. Nationwide will from today raise the limit for those entitled to its best credit-balance interest rates from £1,000 to £1,500 but will increase overdraft interest rates by three percentage points to 12.45%.

The banks are also increasing fees on packaged accounts. Halifax became the latest to lift fees on its packaged accounts last week, increasing the charge on its Ultimate Reward account by £2.50 from £10 to £12.50.

Denying us the best savings rates

Providers may be offering sky-high rates as they look to draw in deposits, but customers have to move fast to get them while some are missing out on hundreds of pounds in interest due to administrative delays.

As many as 22 of the easy access accounts which paid the highest interest rates for balances of £25,000 in the past year were available for less than three weeks. A mere eight accounts remained in the best-buy tables for more than 10 weeks, according to Investec, a private bank.

The FOS has said complaints about savings and deposit accounts nearly doubled last year as providers forced customers to jump through hoops to get the best deals.

Cash-Isa providers are also being reported to the ombudsman for incorrectly processing applications or administrative delays, causing savers to miss out on tax-efficient savings. Barclays has come under fire for delays in processing applications for its 6.5% Tax Haven Isa.

Payment protection insurance

Complaints received by the FOS about loan protection insurance soared to 10,652 for the past year from 1,832 the year before.

Last week, research from Which?, the consumer group, revealed about a third of policies sold before the end of 2006 were potentially worthless because the policyholder might never be able to lodge a claim — either because they were self-employed, had a pre-existing medical condition or were over 65.

The Competition Commission, which is investigating the market, is expected to announce within weeks that banks are making excess profits of as much as £1.5 billion.

Barclays' changes

* Existing customers always in credit will no longer receive interest.

* Customers with authorised overdrafts see rate go from 15.6% to 17.9%, £10 on a £1,000 overdraft.

* Customers with existing Additions, Premier or Premier Life accounts keep their 9.9% discounted rate.

* Unauthorised overdrafts cost £22 every five days with no further charges up to the ‘personal reserve’ limit — typically £250. Above that customers will be charged £8 per payment, to a maximum of £40 a day. Previously they paid £30, up to a maximum of £90 a month.

*New customers offered fee-paying accounts that pay 3% a year, for a monthly fee of £3, with an interest- free overdraft to £300. A new rate of 17.9% for authorised overdrafts.

* Two packaged accounts: Additions Active, costing £14.50, and Premier Life, costing £17.50 if you earn less than £60,000, £25 if you earn more.

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