Moneyfacts recently undertook a survey of 20,000 people to find out their knowledge about credit and debit interest rates they received on bank accounts. The results of the survey were shocking, with almost 60% of people unaware of the amount of interest received on their accounts. Just over 50% were unaware of the rate of debit interest charged when their accounts went overdrawn.
Our View
Whilst the results of the survey were shocking, most people only look at the interest rate and charges for an account when they are opening it. After the account is in operation, people rarely continue to shop around for the most competitive rates.
Account providers prey on human nature being as it is, and frequently offer headline rates for the first 3 or 6 months. This makes sure accounts are opened and a decent rate of interest is paid for a while. Once the rate expires, the providers hope that the account holders can’t be bothered to switch.