Ulster Bank has introduced a new current account that will offer savings to some customers. Holders of the U First current account pay a monthly charge of £6.30 (#8) or £75.60 per annum.
Account holders will then be exempt from standard transaction fees or charges and will be able to avail of various discounts and offers. One key feature of the U First account is an automatic £250 interest-free overdraft facility.
Customers will also have access to preferential rates of interest for a demand deposit account and discounts of 0.5 per cent on personal loan interest rates. The savings account is open to minimum deposits of £10,000 and the interest rate starts at 3 per cent and goes up to 4 per cent. The U First account is the first current account on the Irish market to offer interest on credit balances but the rates are low. The bank will pay 1.25 per cent on balances up to £5,000 and 2.25 per cent for amounts above that. The value the U First account offers depends on customers' banking patterns and lifestyle. There are discounts for travel; hotels; theatre, concert and sports events; and restaurants.
A couple with a joint account clocking up 30 transactions per month would normally pay around £79 per year in charges with Ulster Bank. That's a little more than the monthly U First fee, but taking advantage of the range of discounts on offer and the interest-free overdraft would generate more savings.
An account holder with an average of 20 transactions per month would normally pay around £53 per year in transaction charges. That's £22 less than the annual membership for U First, but if that person ate out regularly in some of the 220 restaurants offering discounts they would save 25 per cent on their bills.
According to Irish Bankers' Federation data from 1999, 47 per cent of customers do not pay account maintenance and banking charges.
AIB gives free banking to fulltime students, customers aged over 60 and customers who maintain a minimum credit balance of £400.
Bank of Ireland provides free banking to students, graduates for two years and customers over 60. Free-banking customers may be exempt from some other charges such as cheque card annual and replacement charges, standing order set-up, and commission and credit transfers but it varies from bank to bank.
The U First account offers a 10 per cent discount on BUPA Ireland health insurance and an interesting feature called 30-day price protection. This cover comes into play if an account holder buys an item that is reduced in price within 30 days. They can be refunded the difference by presenting the original receipt and proof of the sale price. The best tip for day-to-day banking comes from a recent Consumers' Association of Ireland survey on current account charges - avoid unauthorised overdrafts. Exceeding your overdraft limit is very expensive, surcharge interest of more than 9 per cent APR may be added to the overdraft rate. Referral fees of up to £5 may be charged on each item when you are overdrawn.
