Sister banks, Clydesdale bank and Yorkshire bank, have opened current account service, Current Account Directive, which promises to reward balances of up to £3,000 ($4838) with a 4% interest rate until the end of March 2015, falling to 2% thereafter.

To benefit from the rate, customers must deposit at least £1,000 in their account each month.

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Currently UK bank Halifax provides the highest rate on current accounts, at £0.50 for balances of £2,500 or under.

In the wake of the September 2013 introduction of the 7-day current account switching service across the UK, many banks have been offering competing incentives to attract consumers to their account services.

Among them, direct bank FirstDirect has upped its joining offer from £100 to £125, while Halifax also offers a £100 reward for new account holders.

Responding to the news of the launch, Kevin Mountford, head of banking at British price-comparison website Moneysupermarket.com, said: "Whilst savings rates continue to struggle it is imperative that UK consumers look at the wider options available, and in some cases current accounts can now offer a better return."

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"With this in mind, we welcome the news from Clydesdale and Yorkshire, however, make sure that the wider terms and conditions work for you. It is worth noting that the 4% is only an introductory offer and you may need to take further action in 2015, albeit with the new switch service we will no doubt become more comfortable with switching bank accounts".

 

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