The Post Office is launching three new Bank of Ireland current accounts:
Standard, Packaged and a “Control” account.

None pays any interest on credit balances but they do charge a competitive
overdraft rate of 14.9pc. In addition they also guarantee that customers
won’t pay additional fees if they breach their overdraft limit. But to cover
this both the Control and Packaged accounts charge a monthly fee, £5 and £8
respectively. Nick Kennett, the director of financial services at the Post
Office, said this offered the “peace of mind and transparency customers are
crying out for”.

What do you get for this money? The main benefits of the Packaged account are
annual European travel insurance and Green Flag roadside assistance. Clearly
customers need to make sure they would use these “free” perks to justify the
cost. If you travel regularly outside Europe you will be better off opting
for a free bank account and getting your own insurance or looking at a
packaged account (such as those offered by Lloyds or Barclays) that offers
worldwide travel cover.

The only reason to pay for the Control account is if you regularly incur
unauthorised overdraft charges. Mr Kennett claimed that those new to banking
would typically incur penalty charges of between £140 and £160 a year. But
those who fit into this group may want to consider a (free) basic bank
account instead, which by law all high street banks have to provide. These
are aimed at those on low incomes and allow them to set up direct debits and
standing orders so they can qualify for cheaper energy deals, for example.
Andrew Hagger, a personal finance analyst, said: “The Standard current
account is the most attractive, particularly for those who regularly use an
overdraft.” Those who don’t dip into the red should consider the Lloyds
Vantage account, which pays 3pc on credit balances.

Savings deals

All of the saving products offered by the Post Office are Bank of Ireland
savings accounts. These accounts are “pretty underwhelming” according to
Susan Hannums of SavingsChampion.co.uk. “Savers can get more competitive
deals elsewhere,” she said. Those concerned about the robustness of the
Irish banking system should note, though, that the accounts listed below are
covered by the UK’s Financial Services Compensation Scheme, so £85,000 is
effectively guaranteed by the Government.

Online saver

This easy-access account is the best of the savings deals, Ms Hannums said,
but pays just 1.5pc. This puts it “just outside the top 20”. Better-paying
online accounts include NS  I’s Income Bonds paying 1.75pc or
Nationwide’s Savings Plus, paying 2pc, although this rate will drop to
1.75pc on June 1.

This is an online account. If you want to use a Post Office branch to open and
use the account you will get an even less competitive rate. The Instant
Saver account pays just 1.35pc – but this includes a whopping 1.25pc bonus,
which disappears after the first year. Over the long term this offers dismal
value for money.

Fixed-rate bonds

Like most banks, the Post Office offers a range of fixed-rate accounts, but
savers can get more for their money elsewhere. For example, the Post Office
offers 1.9pc on its one-year account, 2pc on its two-year bond and 2.1pc on
the three-year version.

Savers should look instead at Shawbrook, paying 2.15pc on a one-year bond,
KRBS paying 2.36pc on a two-year product and Vanquis paying 2.51pc on a
three-year account.

Isas

The Post Office offers Family Investment Isas, although these are offered in
conjunction with Bank of Ireland. However, rates are again decidedly
average. Its Premier Cash Isa pays just 1.6pc, including a 0.35pc bonus
payable for the first 18 months. It does, however, accept transfers in from
previous Isa subscriptions.

Again, NS  I pays 2.25pc on its Direct Isa. Like most NS  
I products (bar Premium Bonds), this can no longer be opened in post offices
but is run online or by phone. Alternatively, Cheshire Building Society pays
2.3pc – but this does include a bonus of 1.8pc payable until October 31
2014. Bank of Ireland offers a range of fixed-rate Isas through the Post
Office, but like the taxed fixed-rate deals, there are better options
elsewhere, from Virgin, Santander or Coventry Building Society.

Insurance

The Post Office sells life, pet, home and travel insurance. It is the latter
that is particularly popular, given the number of people who renew passports
and buy their foreign currency from the Post Office. But is it value for
money?

The Post Office’s “Classic” policy would cost a family of four £79.04 a year
for European cover. However, Virgin Money offers a policy with very similar
levels of cover for just £33.61 a year. There are even cheaper options
listed on Moneysupermarket.com.

Bob Atkinson, a travel expert at Moneysupermarket.com, said: “The Post Office
travel insurance policies offer a good level of cover for travellers, but
you can find a similar level of cover for less if you shop around.

“One warning for those travelling to Turkey: unlike the majority of insurers,
the Post Office doesn’t cover this country on its European policy – you need
worldwide cover, which will push up prices.” He added that while the Post
Office remained the biggest seller of holiday money, cheaper rates were
available elsewhere.

Credit cards

Again offered by Bank of Ireland, these cards are fairly good value for money,
but still not a best buy. The credit card charges a standard rate of 16.9pc
and offers a 14-month interest-free deal on balance transfers, as well as
three months interest free on new purchases.

Moneysupermarket.com said there were longer balance transfer deals available
from Barclaycard, which offers 26 months interest free. For those who borrow
regularly, Sainsbury’s Rewards credit card offers a low rate of 7.8pc.

-
More details: Barclaycard 26 months
-
More details: Sainsbury’s Rewards

Mortgages

The Post Office primarily offers mortgages to those who have at least 25pc
equity in their home. It offers a range of tracker and fixed-rate products.
Mark Harris, the chief executive of SPF Private Clients, a mortgage broker,
said: “With a wide range of deals for different levels of deposit and
various fee options, there is something for most borrowers.” He said the
best Post Office deal was a five-year fix pegged at just 2.63pc, although
this does have a £1,495 fee.

He said all mortgage products reverted to Bank Rate plus 3.99 percentage
points. “But borrowers should be wary should the Post Office or Bank of
Ireland find itself in ‘exceptional circumstances’ again. It has shown in
the past that it is prepared to change its original terms and raise this
margin, adversely affecting customers.”

Card cash account

The Post Office offers its own card account, but this does not offer as many
facilities as a normal current account; it simply allows state benefits to
be paid into an account then withdrawn at either the Post Office counter or
at a cashpoint.

There are no charges on this account but it does not allow you to go
overdrawn.

Those who want to use their local branch to pay in cheques and withdraw money
at a post office counter can do so if they have a current account with any
of the main banks, including Lloyds, Barclays, Halifax and HSBC.

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The Standard account is the most straightforward offering with no monthly or annual fee to worry about. You can set up an account with an opening deposit of just £100 and when you apply, you can request an overdraft facility, which is currently charged at a lower-than-average rate of 14.9 per cent EAR. On top of this, there are no unarranged borrowing charges, although items returned unpaid or bouncing are charged at £15 a go.

“Consumers tell us they feel penalised by complex and expensive bank charges and fees. When they go overdrawn, they often don’t realise how much it will cost, and this can have a real impact on their finances. With the Post Office what you see is what you get – no surprises, just a fair and transparent way to manage your money,” says Nick Kennett of the Post Office.

If you are always in credit, there are better current accounts such as the Halifax Reward account, which is offering a £100 switching incentive as well as £5 for every month you’re in credit, or Nationwide’s FlexDirect, which pays 5 per cent on balances up to £2,500, although with these, you have to fund the account with up to £1,000 every month.

Despite the lack of in-credit interest, the big selling point with the Standard account is its transparency. The authorised overdraft rate of 14.9 per cent compares favourably with the average rate of 15.99 per cent, and with no charge for an unauthorised overdraft, the average rate of which is 20.84 per cent, you won’t be stung by unexpected costs.

So far, so good then, but things get a little more complicated with the Packaged account. As an “added-value” account, this provides a range of additional benefits including multi-trip family travel insurance and vehicle breakdown cover, in exchange for a monthly fee of £8.

As with the Standard account, the overdraft costs 14.9 per cent EAR and there are no unarranged borrowing charges. However, if you aren’t going to maximise all of the benefits, you won’t get value for your money. The travel insurance cover is limited to Europe and the other benefits are nothing to write home about, with identity theft protection and a discounted Post Office travel booking service that saves you up to 7.5 per cent on various holidays.

“People will welcome the commitment to providing straightforward bank accounts without hidden charges. But while ‘free banking’ has always been a myth, anyone thinking about paying for a packaged account with insurance included should carefully consider whether it does represent good value for money for them,” says Which? executive director Richard Lloyd.

Many other banks have come under fire for the way they sell this type of account. Just three in ten packaged account holders use their benefits regularly, while two in ten have never used them at all, according to a recent uSwitch.com survey. There have even been concerns over mis-selling as some customers were paying for an account and benefits that they could never claim on.

The Post Office’s third offering, the Control account, also carries a fee, this time of £5 a month, despite being aimed at customers on lower incomes who may have struggled to manage their finances in the past and can’t get a regular bank account.

“The Post Office Control account is effectively a basic bank account, for which there are many other similar products in the market. A fee of £5 per month is expensive, given that most banks do not charge a fee for these types of accounts,” says Brian Brown of analysts Defaqto. Charging financially disadvantaged customers a monthly fee does seem harsh, and could put off the very people who need this service the most, yet there are some attractive features.

The minimum opening deposit is just £20 and although there is no overdraft facility or debit card (you get a cash card instead to withdraw money), you can set up direct debits and standing orders. The Post Office has said that customers could save on average between £125 and £215 through being able to switch their utility payments to direct debit. More importantly, there are no charges for bounced payments such as direct debits or standing orders. Other basic bank accounts charge up to £25 a time for payments when there aren’t funds in the account.

While none of the new Post Office current accounts on offer could be accused of being terribly exciting, each one has been set up to appeal to quite distinct needs. As a trusted brand, transparent and simple features are the way to go and with such a large branch network, it could become a serious challenger in the current account market by the time it rolls out to all 11,500 branches in 2014. But that doesn’t mean there aren’t better accounts for you.

“It is important that anyone looking to open an account considers the benefits on offer and looks at alternatives as these accounts aren’t among the market-leading offers currently available, and don’t offer some of the incentives available on other accounts such as credit interest and interest-free overdraft facilities,” says Charlotte Nelson of Moneyfacts.co.uk.

Market comparisons

Top current accounts for in-credit

Nationwide, BS Flex Direct

Minimum monthly funding: £1,000

AER: 5% up to £2,500

Post Office, Standard Account

£100 deposit required to open account

AER N/A

Top current accounts for unauthorised overdrafts

Santander, Everyday Current Account

Overdraft rate: 0% for 4 months

£1 per day capped at 20 days per month

Post Office, Standard Account

£100 deposit required to open account

Overdraft rate: 14.9%

Basic accounts

Lloyds TSB, Cash Account

Charge N/A

Post Office, Control Account

Charge £5 per month

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Consumers paid $400 million more in checking account overdraft fees at banks and credit unions last year than in 2011, according to a recent estimate by the Illinois-based economic research firm Moebs Services.

The increase — to $32 billion nationwide, up from $31.6 billion — follows two straight years of declines.

Moebs CEO Michael Moebs put the blame squarely on consumers, many of whom “are terrible at handling finances.”

“It’s a behavioral thing.”

Others say banks have done a good job persuading people to sign up for overdraft protection when they would be better off without it.

“Banks have stepped up the marketing of such services and appear to be quite effective at convincing consumers they need this coverage,” said Bill Hardekopf, CEO at the credit card comparison site Lowcards.com.

The bounce in overdraft fees last year — which Moebs attributed to higher volume rather than an increase in individual fees — came despite federal rules that took effect in mid-2010 requiring financial institutions to get customers’ permission before enrolling them in so-called courtesy overdraft protection on ATM and debit card transactions. Previously, many banks automatically enrolled people in the programs.

Now, customers who don’t opt in for coverage simply have their debit card purchases or ATM withdrawals denied if there isn’t enough money in the account to cover them.

The regulations were designed to help people avoid being blindsided by a cascade of overdraft fees, especially while making small everyday purchases. Buying a $3 morning latte followed later by a bag of chips and candy bar before realizing an account was overdrawn could rack up three $35 overdraft fees, for example.

(The rules don’t apply to paper checks or online bill payments, which banks can automatically cover for a fee or that trigger charges if they bounce.)

Despite the opt-in rule, a study last year by the Pew Charitable Trusts found that just over half of consumers hit with overdraft fees at the register or ATM said they didn’t realize they had signed up for overdraft protection.

In essence, the survey indicated customers were being tricked into paying for a service they didn’t want.

Besides being targeted by regulators and long-maligned by consumer groups, overdraft fees have been under attack in recent years in class-action lawsuits filed against a number of big banks, which were accused of improperly manipulating debit card transactions by processing them from highest amount to lowest. That practice tends to drain an account more quickly and trigger the most overdraft fees.

So far, a number of banks have settled, agreeing to pay millions of dollars to compensate customers and to switch to processing transactions in the order they come in.

With overdraft fees apparently on the upturn, U.S. Reps. Carolyn Maloney, D-N.Y., and Maxine Waters, D-Calif., introduced a bill last month targeting “unfair” overdraft charges by mandating additional restrictions. A similar bill failed last year.

The bill, which the banking industry opposes as intrusive and potentially limiting to consumer choice, would extend the opt-in requirement to paper checks and recurring monthly payments and ban the “manipulation” of transactions in a way that maximizes fee income, such as high-to-low posting.

The bill also would stop financial institutions from charging more than one overdraft fee per month or more than six per year and require the fees to be “reasonable and proportional” to the amount of the overdraft.

It also would prohibit fees if the overdraft resulted solely from a debit hold placed on an account that exceeded the amount of the transaction, such as the typical $100 hold some gas stations impose on debit card purchases no matter how much gas gets pumped.

“In 2010, regulators slowed the flood of bank revenue from unfair overdraft schemes,” said Ed Mierzwinski, consumer program director for the U.S. Public Interest Research Group in Washington, D.C.

“But Congress needs to step in to finish the job so consumers won’t have their wallets emptied by bank tricks and traps.”

Article source: http://qctimes.com/business/60fe1f66-eefc-5522-b190-eb44cca55531.html

By
Amy Andrew

PUBLISHED:

04:01 EST, 16 May 2013

|

UPDATED:

04:01 EST, 16 May 2013

Money can be tight during the initial months, and even years, of a fledgling business, so it is important that you stay firmly on-top of your finances.

If you are able to run your business and
personal banking alongside one another in an ordinary current account,
you will be able to make the most of the perks, free cash and rewards
often offered with these accounts.

But most people will struggle with this approach.

Keeping your business banking
separate from your personal account means it will be far easier for you
to manage cashflow, as well as work out your tax liability at the end
of the year.

Seeds of growth: Small-business owners need to think about their banking options

WHO CAN APPLY FOR A BUSINESS ACCOUNT?

If you have set up as a limited company or partnership, you are required to have a business bank account.

As a sole trader, you have the option of using your own personal account
or opening a separate business bank account. Many choose the latter, as
it can make your financial affairs simpler to run.

Other organisations which may decide to open a business current account include charities, clubs and pension funds. 

If you are a sole trader (not a limited
company), then you can simply use your normal bank account for your
business, with all the better terms that involves.

At their simplest, business accounts simply offer a cheque and paying-in book. But many come with extras including free business banking, interest on in-credit balances, overdrafts, and fee-free transactions.

This is Money has picked out some of the best accounts for start-ups to help you choose the best option for your new business.

NatWest: Fee-free overdraft

Two years’ free business banking, a £500 fee-free overdraft and free online courses.

What is is?

Cash can be tight when you first set up a small business, so an account that offers a £500 fee-free overdraft is not to be sniffed at.

The NatWest start-up account could also help you to save money with added perks to avoid potentially damaging situations – for example a free employment law and health and safety support tool worth £360.

Accountholders will also have access to industry networks, for example Bizcrowd – to help you connect directly to customers that need your products and services – and The Federation of Small Business.

The cherry on top is 12 months free Regus Businessworld
Gold Membership – which allows you to kick back in any of the 1,200 business lounges worldwide.

NatWest will also waive the annual fee on their business credit card for the first 12 months, usually £32.

The small print

You don’t need to pay any transaction fees for two years no matter how many deposits you make, as long as your business turnover is less than £1 million and you started trading within 12 months of opening the account.Your £500 overdraft will cost £50 per year after the first year.

Unpaid item fees cost a whopping £35 a day – up to a maximum of £140 – or £30 if NatWest decide to honour your payment, even if you don’t have the funds. Interest is then charged at 29.9 per cent. Fees are capped at a pretty hefty £540 for every quarter, with interest charged on top.

After the two years your account will revert to a standard tariff – costs start at 40p per direct debit or standing order.

Santander: Interest paying account

Santander: offers interest-paying banking for start-ups

The major draw for Santander’s Start Up Business Current Account is that it pays 0.25 per cent in-credit interest on your money

What is it?

The
Santander Start Up Business Account offers unlimited free day-to-day
transactions for a year – or 18 months if you’re a Santander
customer.

If you want to extend your free transaction period and you’re not already a customer, you can sign up for an account any time within the first 12 months.

The 0.25 per cent in-credit interest payments help this account to stand out from the crowd. This may not sound like a lot but, as the saying goes, every little helps – and will quickly add up on bigger balances.

Santander also pays up to 3 per cent interest on their 123 current account which, if you decide to open up an extra Santander account, will make your money work even harder during those early business days.

You get free, unlimited day-to-day
banking including direct debits, standing orders, cheque deposits and
withdrawals, debit card payments, cash withdrawals and BACS credits.

The small print

To be eligible for this account, your business must be less than 12 months old with an annual turnover of less than £250,000. After the end of the free period you will be charged £7.50 per month.

Santander does not offer any
unarranged overdrafts on its business banking – unpaid items will be
returned and charged at £15 per item. Anything that cannot be returned
will be subject to 25.5 per cent interest.

Arranged overdrafts, which can be between
£500 and £25,000 depending on your circumstances, incur a fee of £100 per year, and are reviewed every 12
months. Interest is charged at 5.5 per cent. Remember, charges on your overdraft will cancel out interest clocked up on your in-credit balance.

You can manage your account online, by phone, Santander ATM’s and at Post Office branches.

Lloyds TSB: Discounted accounting software

Lloyds TSB Commercial Banking Start-up accoun tholders will benefit from free Sage Planning for Business software, which could help you to get your start-up moving in the right direction, or help turn your business idea
into a reality.

What is it?

Sage is one of the most popular kinds of accounting software available.

If you open an account with Lloyds you will get the free Sage business planning software to help you launch your business, plus a free 90-day trial of Sage Start-up and up to a 50 per cent discount if you decide to buy it.

You also get a 90 day free trial of Sage Instant Accounts, a bookkeeping
package. Again you can apply for up to 50 per cent off if you then decide to buy the software.

In addition you will get 18 months free day-to-day banking and support from a relationship manager.

You will not be charged for paying in or taking out cash, paying in or issuing cheques, or paying standing orders and direct debits.

There is no limit on the number of deposits or withdrawals, and you do not need to keep a minimum balance in your account to qualify. However, you must not go overdrawn without prior agreement.

The small print

If you exceed your limit by more than £50, an unauthorised borrowing fee of £15 per day (maximum) will be levied. You will be charged again every time you increase your unauthorised amount by £50 from the previous day’s balance. If your payment is returned by the bank you will be charged £35 per item.

Authorised overdrafts can be arranged but will be subject to an arrangement fee – which will depend on your circumstances. When your free business banking period ends you’ll automatically be placed on a monthly price plan, which gives you a set number of transactions each month for a fixed fee.

These range from £5 a month, allowing for a maximum of five transactions per month, to £40  – which allows for 125.

Barclays: Tailor your account

Those that apply for the Barclays Start-up Business account will get between 12 and 24 months free banking. Fees and charges will depend on your individual banking package.

What is it

Those interested in this account will set up a meeting with a Barclays adviser, who will help you to come up with a business banking package that suits you.

A basic package is free, but there are a number of options that are available which could help you to save money on key services. Fees range from around £2.75 to £40 per month.

Options include adding credit-checking software to help you recover and reduce late payments and bad debts from your customers. This may be useful if your firm deals with business rather than private clients.

Other add-ons include a book-keeping service or online backup software which automatically protects up to 2GB. Business skills training is also available.

The small print

Overdraft arrangement fees vary, but start at around £75 a year. Interest on informal overdrafts is charged at 29.5 per cent – unpaid items cost £35 a time and paid, £30.

After your free banking period finishes, you will be charged a monthly fee, which will depend on your individual package.

HSBC: Unlimited free banking

HSBC’s Business Direct Account offers a decent basic service with 18 months’ free unlimited transaction banking.

However, the account remains
free (with no monthly charge) after this period, so long as you stay within
certain limits, although some branch-based services are then charged for.

What is it?

After the 18 months most services remain free, although there are a few conditions so it is worth checking the small print.

For example, bill payments, transfers and debit card payments are all cost-free – and there is no monthly fee. ATM cash withdrawals of less than £250 per month are also free.

You are also allowed to pay by cheque five times a month without incurring a charge, but you will have to pay a small amount to pay money into your account in branch.

The small print

The account is limited to start-ups with a maximum turnover of £500,000.

HSBC operate a flexible overdraft system on this account – you can arrange a formal overdraft for anything between one month and a year. Interest is calculated daily, with rates starting at 3 per cent.

If you want an overdraft you will have to pay an arrangement fee, which is 1.75 per cent of the amount you apply for – although it will be a minimum of £100.

Interest on informal overdrafts is charged at 29.5 per cent, returned items cost £25 and paid items charge £4 a day.

If you go over your limit you will be charged a daily fee of £8.

What if I have bad credit?

If you have a poor
credit record, you may find it hard to open a business account in the
current financial climate.

So, if you have been turned away by high street banks, an alternative option could be the Cashplus Business Account.

There are no branches, no cheque clearing facility and no overdraft, but you can apply online for this account without the need for a credit check or interview.

You pay an annual
fee of £29.99 and £2 per ATM withdrawal. There are no fees for
sending and receiving bank transfers, for using the account’s card or
for paying cash into the account.

The Federation of Small Business banking

The Federation of Small Business (FSB) offers a banking package to members.

You can access your account online, over the telephone, by post or by arrangement at your local Post Office. Benefits include:

•    Free banking
•   
No charge for paying in up to £4,000 cash per month (a charge of 40p
per £100 will apply to cash deposits exceeding the £4,000 cash deposit
limit).
•    Interest paid on entire credit balance
•    A
fee-free overdraft facility
•    Access to a business charge card – with no monthly
fee
•    A free change facility at Co operative Bank branches (by arrangement), so you always have enough coins and notes
•    £25 loyalty bonus every year
•   
Handling charge of 2 per cent for overseas cash advances and a foreign currency
commission charge of 2.75 per cent (dependent on the
cardholder’s credit limit and any local currency restrictions)

This
account is only available to members of the FSB. To find out more about
the services and benefits of membership, visit www.fsb.org.uk

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Article source: http://www.dailymail.co.uk/money/smallbusiness/article-2318850/Are-small-business-start-Five-best-current-accounts-businesss.html?ITO=1490&ns_mchannel=rss&ns_campaign=1490

Post Office has today launched three day-to-day bank accounts, including the Standard Account, Packaged Account and Control Account.

It is aiming to revolutionise the current account market with its offering of “fair and transparent” products with no hidden charges.

“What you see is what you get – no surprises, ” said Nick Kennet, Post Office’s director of financial services.

He added: “Consumers tell us they feel penalised by complex and expensive bank charges and fees.

“When they go overdrawn they often don’t realise how much it will cost and this can have a real impact on their finances.”

The Post Office, working in partnership with Bank of Ireland UK, announced its first foray into the current account market last month, adding to the mortgages, saving accounts, credit cards and insurance products it already offers.

Initially the new current accounts will be trialled across 29 branches in East Anglia before a wider rollout nationwide in 2014.

So what’s on offer?

The Standard Account is a typical current account that comes with a debit card and can be set up with a minimum deposit of £100. There are no charges for unauthorised overdrafts and an interest rate of 14.9% EAR levied on authorised overdrafts, which puts it “amongst the most competitive on the market,” said Andrew Hagger from Moneycomms.co.uk.

The Packaged Account gives customers benefits, such as multi-trip travel insurance and car breakdown cover, for a fee of £8 per month. However, Kevin Mountford, head of banking at MoneySupermarket, points out: “The insurance cover is limited to just Europe, and as with all packaged accounts customers need to make sure they maximise all of the benefits to get the most out of their monthly fee.”

The Control Account has a monthly fee of £5 but will ensure you do not face any unauthorised fees or unpaid charges, such as direct debits or standing orders. Mountford says, this account “may be a good starting point for people who have struggled to manage their finances in the past”.

What’s the verdict?

“There’s nothing particularly exciting with these products, but then many people are just looking for something that does the job, no bells and whistles, just a no-nonsense account without hidden or excessive fees, all backed up with consistently good customer service and a system that doesn’t keep falling over due to IT issues,” says Hagger.

While Mountford adds: “It is important that anyone looking to open an account consider the benefits on offer and look at alternatives as these accounts aren’t among the market leading offers currently available, and don’t offer some of the incentives available on other accounts such as credit interest and interest free overdraft facilities.”

According to Moneywise.co.uk Compare, our comparison service, the best buy current account is First Direct ISA Account, which offers new customers £100 on switching, if you set up two direct debits or standing orders and transfer £1,000 per month into the account in the first three months.

The next best current account around is Nationwide’s Flex Direct, which offers customers a 5% interest on balances up to £2,500, and gives a fee-free overdraft in the first year.

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Article source: http://uk.finance.yahoo.com/news/post-office-current-accounts-launched-102218276.html

“I went to the deli department and started to get my coupons out of my purse,” she said.

Everything seemed routine, until she received a text alert on her cell phone that her bank account was overdrawn. Confused, she called the bank and discovered her wallet had been stolen while she was at the store.

Pemberton says she briefly stepped away from her cart, which had her purse sitting in it. She thinks someone snatched her wallet out of her purse, ran to Red Rock Casino and withdrew $2,000 from her account.

“I filled out my police report and started doing all the things I should do as far as protecting myself,” she said. “She had every single piece of info. about me, including some things about my children.”

Pemberton’s bank, Chase Bank, opened an investigation. She assumed everything would be resolved, but it wasn’t. The bank accused her of faking the crime.

“They had said because we are in Nevada and this is Las Vegas, how would they know I didn’t lose all my money in the casino and didn’t want to tell my husband?” she said. “Being the victim was the thing that hurt me the most.”

Pemberton turned to 8 on Your Side which asked Chase to take a second look at the case. The bank did and, after further investigation, cleared Pemberton’s name. Bank representatives said they obtained proof she did not authorize the charge. They said they looked at the signature made by the scammer and realized it did not match Pemberton’s.

Now, her trips to the grocery store are much different. She keeps her purse close and never leaves her cart. She says she hopes others learn from her mistake, so no one else goes through her experience.

8 on Your Side asked Red Rock Casino for the surveillance footage of the person who used Pemberton’s credit card, but casino representatives said they no longer had it available.

If you have a problem you’d like 8 on Your Side to investigate, call 702-650-1907 Monday through Thursday.

Article source: http://www.8newsnow.com/story/22244240/8-on-your-side-bank-balks-at-helping-id-theft-victim

It is aiming to revolutionise the current account market with its offering of ‘fair and transparent’ products with no hidden charges.

‘What you see is what you get – no surprises,’ says Nick Kennet, Post Office’s director of financial services.

He adds: ‘Consumers tell us they feel penalised by complex and expensive bank charges and fees.

‘When they go overdrawn they often don’t realise how much it will cost and this can have a real impact on their finances.’

The Post Office, working in partnership with Bank of Ireland UK, announced its first foray into the current account market last month, adding to the mortgages, saving accounts, credit cards and insurance products it already offers.

Initially the new current accounts will be trialled across 29 branches in East Anglia before a wider rollout nationwide in 2014.

What’s on offer?

The Standard Account is a typical current account that comes with a debit card and can be set up with a minimum deposit of £100. There are no charges for unauthorised overdrafts and an interest rate of 14.9 per cent levied on authorised overdrafts, which puts it ‘amongst the most competitive on the market’, according to Andrew Hagger from Moneycomms.co.uk.

The Packaged Account gives customers benefits, such as multi-trip travel insurance and car breakdown cover, for a fee of £8 per month. However, Kevin Mountford, head of banking at MoneySupermarket, points out: ‘The insurance cover is limited to just Europe, and as with all packaged accounts customers need to make sure they maximise all of the benefits to get the most out of their monthly fee.’

The Control Account has a monthly fee of £5 but will ensure you do not face any unauthorised fees or unpaid charges, such as direct debits or standing orders. Mountford says this account ‘may be a good starting point for people who have struggled to manage their finances in the past’.

What’s the verdict?

‘There’s nothing particularly exciting with these products, but then many people are just looking for something that does the job, no bells and whistles, just a no-nonsense account without hidden or excessive fees, all backed up with consistently good customer service and a system that doesn’t keep falling over due to IT issues,’ says Hagger.

Mountford adds: ‘It is important that anyone looking to open an account considers the benefits on offer and look at alternatives as these accounts aren’t among the market leading offers currently available, and don’t offer some of the incentives available on other accounts such as credit interest and interest-free overdraft facilities.’

This story was written by our sister website www.moneywise.co.uk

Article source: http://www.moneyobserver.com/news/13-05-13/post-office-launches-transparent-current-accounts

By
Lee Boyce

PUBLISHED:

05:54 EST, 13 May 2013

|

UPDATED:

06:30 EST, 13 May 2013

The Post Office has announced details of three current accounts which will be piloted in 29 branches in East Anglia from today before a full launch across its network next year.

Two of the three accounts carry a monthly fee, while the other is a ‘free’ standard account. All will be offered in partnership with Bank of Ireland UK.

The three accounts on offer are named Standard, Packaged and Control. It says each has been designed to ‘appeal to different customer needs.’

Current accounts: Those in East Anglia can open a Post Office bank account from today – with plans to roll it out across the branch network by next year

Its decision to launch current accounts comes ahead of new seven day switching rules which come into force in September with the aim to make it easier and quicker for customers to move bank accounts.

The accounts can be opened in branches in the trial area, or else customers can register their interest ready for the full launch next year. You can see at list of the trial branches here.

The Standard Account is the Post Office’s ‘free in credit,’ everyday banking offering. Accounts can be set-up with an opening deposit of £100, and customers can apply for an overdraft facility when opening, or anytime afterwards.

The overdraft interest rate is currently 14.9 per cent, which is competitive, and there are no unarranged borrowing charges.

Its Packaged Account has a monthly fee of £8 and comes with European multi-trip family travel insurance and vehicle breakdown cover. It also has identity theft protection services and comes with the same overdraft interest rate as the Standard Account.

5 FAVOURITE CURRENT ACCOUNTS

Finally, the Control Account comes with a fixed monthly fee of £5. This account is designed, it says, as a basic account to help customers keep in control of their finances and is targeted at those who are new to banking, potentially on lower incomes or who have had difficulty with default bank charges in the past.

Although this account carries the monthly fee, there are no further charges for returned unpaid items such as direct debits or standing orders.

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Consumer group Which? has warned some customers may be
reluctant to open the Control Account if they had to pay a monthly fee for.

Richard Lloyd, the executive director of Which?, said: ‘The
monthly charge for the new basic bank account might put off people who need
this service the most, and the Post Office should think again if they find
evidence of this.’

But the Post Office argues that basic account customers
could save up to £215 a year by being able to pay their energy bills via direct
debit. Other basic bank accounts are free but charge hefty fees if direct debit payments are missed. Read our guide here.

All three of the Post Office accounts will offer access to online banking.

Nick Kennett, director of financial services as the Post Office, said: ‘Consumers tell us they feel penalised by complex and expensive bank charges and fees. 

‘When they go overdrawn they often don’t realise how much it will cost and this can have a real impact on their finances. With the Post Office what you see is what you get – no surprises, just a fair and transparent way to manage your money.’

Kevin Mountford, head of banking at
MoneySupermarket, said: ‘As you would expect from a trusted brand such
as the Post Office, these accounts offer simplicity and transparency,
and with a large branch network, we could see it become a serious
challenger in the current account market by the time of the national
roll out to all 11,500 branches in 2014.

‘However,
it is important that anyone looking to open an account, consider the
benefits on offer and look at alternatives as these accounts aren’t
among the market leading offers currently available, and don’t offer
some of the incentives available on other accounts such as credit
interest and interest free overdraft facilities.’

Bank of Ireland: The Post Office is partnering with the bank to offer current accounts

Branch network that dwarf that of other British banks

The Post Office is bringing current account banking back to its branches for the first time since it sold Girobank more than two decades ago.

Almost three million customers already hold a Post Office financial services product. It offers mortgages, savings, credit cards and insurance, as well as currency exchange.

Its push into financial services in recent years has already delivered big results. Its savings book currently sits at £17billion, while it has 2,100 cash points and is a major player when it comes to travel cash.

Crucially, it has a network of over 11,500 post offices branches – more than the combined total of branches held by British banks.

Even after recent closures, many rural areas still have a Post Office. It serves 20million customers a week while 99.7 per cent of the total population live within three miles of one.

This could make the Post Office current account appealing in villages and small towns which have seen bank branches close down in recent years. It may also make posting a letter even trickier – although 6,000 branches are currently undergoing a £1.34bn modernisation programme.

Familiar sight: Queues are a common factor at Post Office’s – would a surge of current account customers mean more queues?

Will bank accounts save Post Office branches?

A survey carried out by the National Federation of Subpostmasters (NFSP) found a large number of believe their own branch to face a serious threat of closure.

Their ‘extremely uncertain future’ was due to falling incomes and a lack of new work, after a plan to turn Post Offices into a ‘front office’ for government services, announced in 2010, had failed to materialise.

Just 17 per cent of subpostmasters said they could see a strong future for their business, while 51 per cent said they had seen their Post Office income decrease in the past year.

The research found Post Office overheads increased for 70 per cent of subpostmasters while staff costs rose for 48 per cent of those who responded.

The NFSP said the survey revealed few new services had been introduced since 2010, and most of the financial and government services were yielding little or no income for the vast majority of subpostmasters.

It said less than 10 per cent of subpostmasters receive any income from many of the key Post Office financial services, such as credit cards, insurance for homes, cars and vans, and life assurance, while 70 per cent reported an increase in overheads and 48 per cent reported an increase in staff costs.

It remains to be seen if they would see any benefits from having a current account offering in its range.

Can the Post Office become a viable ‘challenger’ to the big banks?

Comment by This is Money banking correspondent Lee Boyce

The Post Office already has the branch network to appeal to those to whom a local branch is important. Almost everyone lives or works within a reasonable distance of a Post Office branch and it says it is committed to not close anymore branches.

Additionally, many customers are disillusioned with big banks and are looking for new alternatives after a spate of scandals.

A big question however is: can its branches cope? I know it has a large number of them, but often, especially around lunchtime, queues can be dozens deep as the counters deal with parcels or and currency exchange.

Would it be biting off more than it can chew with a current account, and would customers be lining up in the same queues to do their banking?

It will soon become clearer after the East Anglia trial – and it’s good to see it is taking things slowly rather than jumping in straight at the deep end.

Another potential snag which may deter customers is the fact it is partnering with Bank of Ireland UK. Although it has partnered with the Post Office for its financial products for a decade, many may be put off by recent hikes that were made to rates on tracker mortgages, despite the bank rate remaining unchanged .

Writing this weekend, Jeff Prestridge, personal finance editor for This is Money sister title Financial Mail on Sunday, said: ‘The Post Office is doing itself no favours by continuing its business relationship with the tarnished Bank of Ireland, the provider of its branded mortgages and supplier of  its soon-to-be launched current account.

‘Last week, 13,500 Bank of Ireland home loan borrowers saw the rate on their base rate tracker mortgage jump, some by more than 100 per cent from 2.25 per cent to 4.99 per cent.

‘This was not because the base rate (0.5 per cent) had risen, but because the bailed-out bank needs to build up more capital reserves.

‘It was a despicable act – made possible by it triggering some clause buried away in the mortgage contracts of these borrowers. If I was a Post Office boss, I would be looking for a more reputable business partner.’

The current accounts the Post Office is offering do give customers a decent range of banking.

One thing is for sure – it has a solid customer base already for its financial products. Three million hold a financial product with them already – if it managed to get just 10 per cent of these to switch bank, you’re talking 300,000 customers.

It’s interesting to see how popular these current accounts will be.

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Article source: http://www.dailymail.co.uk/money/saving/article-2323709/Post-Office-announce-details-current-accounts.html?ITO=1490&ns_mchannel=rss&ns_campaign=1490

The Post Office is launching three new current accounts in a trial at 29
branches in East Anglia as it tries to become the latest challenger to the
established high street banks.

The Post Office will charge a fee for two of the three current accounts, due
to be rolled out across the 11,500-strong branch network next year.

Only one account, the Standard Account, will be free. It can be opened with a
£100 deposit and comes with a debit card and overdraft facility with a
competitive overdraft rate of 14.9pc EAR (equivalent annual rate).

The Packaged Account and Control Account will charge a monthly fee of £8 and
£5, respectively.

The Packaged account offers benefits including European Multi-trip Family
Travel Insurance and Vehicle Breakdown Cover.

The Control account is aimed at customers on low incomes or who have problems
with bank fines. It can be opened with a £20 deposit and comes with a £5
monthly fee, but no extra charges when payments such as direct debits are
returned unpaid.

Nick Kennett, director of financial services at Post Office, said: “Consumers
tell us they feel penalised by complex and expensive bank charges and fees.
When they go overdrawn they often don’t realise how much it will cost and
this can have a real impact on their finances.”

The Post Office, in partnership with the Bank of Ireland UK, said it will
offer fair and transparent products with no hidden charges.

Andrew Hagger of website Moneycomms said: “There’s nothing particularly
exciting with these products, but then many people are just looking for
something that does the job, no bells and whistles, just a no-nonsense
account without hidden or excessive fees, all backed up with consistently
good customer service and a system that doesn’t keep falling over due to IT
issues.”

The National Federation of Sub-postmasters (NFSP) said last week it was
concerned the new current accounts, which the
Post Office first announced in April , would not deliver any
significant income boost for the network.

Richard Lloyd, executive director at the consumer group Which?, said the Post
Office could become “a force for change” in retail banking,
although the packaged account fee might have to be reconsidered.

He said: “Anyone thinking about paying for a packaged account with
insurance included should carefully consider whether it does represent good
value for money for them.

“The monthly charge for the new basic bank account might put off people
who need this service the most and the Post Office should think again if
they find evidence of this.”

Postal Affairs Minister Jo Swinson said: “This is just one way in which
the Post Office is modernising to make sure it has a successful and
sustainable long-term future.

“The Government is committed to supporting the Post Office which is why
we’ve committed £1.34 billion to both maintain and modernise the network,
keeping post offices at the heart of local communities.”

Changes to make it easier for people to switch current accounts are being
introduced this September by the Payments Council.

Customers can chose their switch date and the whole process will take seven
days as opposed to the 18 days it currently takes. Payment agreements will
be switched automatically t o their new account.

The best of the week’s money advice is emailed out on Wednesdays. Sign
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Article source: http://uk.finance.yahoo.com/news/post-office-trials-current-accounts-102716904.html

11,500 local branches will soon offer current accounts

Consumer group Which? has warned that a monthly charge could discourage people from opening bank accounts at the Post Office.

A pilot scheme is being launched at 29 post office branches in East Anglia, to try out three different types of current account.

The service will then be rolled out across the country in 2014.

But those taking out the Post Office’s “control” account, will have to pay a monthly charge of £5.

The Post Office says its new accounts will offer greater choice for customers, as well as a more inclusive approach to banking.

Its network of 11,500 branches across the country is also bigger than that of all the UK’s High Street banks combined.

New accounts

The main bank account will be free, but two will have a monthly charge.

• Standard Account: This will be free to customers while they are in credit. It comes with a debit card. Customers can apply for an overdraft and a chequebook.

• Control Account: A basic account for those on low incomes, or who are new to banking. It will cost £5 a month, but there will be no further charges for unpaid direct debits and standing orders.

• Packaged Account: An account that will include insurance and car breakdown benefits. It will cost £8 a month.

The Post Office says the charges will be transparent.

“Consumers tell us they feel penalised by complex and expensive bank charges and fees,” said Nick Kennett of the Post Office.

“When they go overdrawn they often don’t realise how much it will cost and this can have a real impact on their finances,” he added.

Assessing value

However, Which? is warning that some customers may be reluctant to open accounts they have to pay for.

“The monthly charge for the new basic bank account might put off people who need this service the most, and the Post Office should think again if they find evidence of this,” said Richard Lloyd, the executive director of Which?

Other operators offer free basic accounts.

Kevin Mountford, of Moneysupermarket.com, advised customers to look at alternatives.

“These accounts aren’t among the market leading offers currently available, and don’t offer some of the incentives available on other accounts such as credit interest and interest-free overdraft facilities,” he said.

But the Post Office said some customers were discouraged from opening basic accounts, because of worries that they might be charged for a direct debit payment that is missed.

It also said that basic account customers could save up to £215 a year by being able to pay their energy bills via direct debit.

Which? also questioned how much demand there might be for the more expensive account.

Anyone taking out the Packaged Account, which costs £8 a month, “should carefully consider whether it does represent good value for money for them”, said Richard Lloyd.

However, he added that an extension of choice in banking was welcome, to challenge the services provided by the major High Street banks.

“If they offer widely accessible, competitive products and good customer service, the Post Office could become a force for change in retail banking,” he said.

The network

The Post Office was also keen to point out that the new accounts could support the incomes of sub-postmasters.

Last week the National Federation of Sub-postmasters said many of its members were struggling to survive.

In a survey, 51% of those who run the network of 11,500 smaller post offices said their income had dropped in the last year.

The Post Office said the new current accounts on offer would generate increased income to sub-postmasters, and support the financial future of the network.

The Communication Workers Union (CWU) is currently engaged in a campaign of industrial action, to fight Post Office plans to franchise out 70 of its main, or Crown offices.

Such Post Offices would then be run by private operators, typically other local retailers.

The Post Office says such branches are currently losing money.

Article source: http://www.bbc.co.uk/news/business-22508189