Halifax launches Reward Current Account

Halifax has announced the launch of a new current account, the Halifax Reward Current Account, which replaces the group's existing interest (credit/debit) and fee structure with a new approach based on simplicity and an even better deal for customers.

For the new account, credit interest will be replaced by set net cash payments after tax of £5 per month irrespective of balance when accounts are funded with £1,000 a month. Traditional arranged and unarranged overdraft fees and interest rates will be replaced with a daily fee. The Halifax Reward Current Account will be launched 9th February 2009.

Unlike other offerings on the market, with the Halifax Reward Current Account there are no catches in order to qualify for the £5 net monthly payment. The account does not require a cross product holding and there is no annual fee. The Halifax Reward Current Account is open to both new and existing customers.

The Halifax Reward Current Account features:

A market leading benefit

Customers who fund their account with at least £1,000 a month will receive a net cash payment after tax of £5 - regardless of their debit/credit balance

A customer earning 0.1% credit interest would need to maintain a balance of £75,000 throughout the month to earn the equivalent amount of net interest. The average current account balance in the UK is £1,740.

Overdraft features of the new account

Traditional unarranged overdraft fees will be removed - no debit interest, no monthly unarranged overdraft charges and no fees for paid or unpaid items will be applied. No charge is made if an account is brought into credit by the end of the banking day.
Currently, the unarranged overdraft charge for the Halifax High Interest Current Account is £28 a month, with paid and unpaid item fees at £35 (subject to a maximum of three a day). The new Reward Current Account will not feature these.

Customers using an arranged overdraft of up to £2,500 will be charged £1 per day for each day they use their overdraft. The OFT study into 'Personal Current Accounts in the UK' published in July this year showed that around two-thirds of all active accounts didn't use an arranged overdraft.

For those using an arranged overdraft of over £2,500 a charge of £2 per day will be applied for each day they use their overdraft. The OFT study revealed that 95% of people who utilised an arranged overdraft had an average daily balance of less than £2,000.

Customers who use an unarranged overdraft will be charged £5 each day they are over limit. We will write to customers immediately to inform them that they have exceeded their arranged limit and again every seven days after they remain over limit.

Market leading value for new and existing customers

With a £5 net cash payment after tax paid monthly, account holders who fund their Halifax Reward Current Account with at least £1,000 per month are continuously rewarded for their custom. Those customers could receive a £60 net payment each year irrespective of balance.

The Halifax Reward Current Account will be available to new and existing customers from 9th February 2009. The Halifax High Interest Current Account (HICA) and Halifax Current Account will not be available to new customers from this date.

It is intended that all Halifax accounts will move to a daily overdraft charging structure like this in 2009. In the interim existing customers will continue to use their accounts as normal.

Customers in the Moneyback Current Account (an account which hasn't been available to new customers since January 2008) will be transferred across to this new account - maintaining an account that rewards customers for their business. Moneyback customers need do nothing - we will be writing to inform them of this change in January.

Mike Regnier, Halifax head of banking, comments: "Our new Reward Current Account is simple and easy to understand. Customers are regularly rewarded with the potential to earn as much as £60 a year banking with the Halifax."