BOI raises stakes in battle for accounts

BANK of Ireland’s battle with AIB for business current accounts intensified yesterday as BOI’s announced it will pay interest on credit balances at up to four times the rate of AIB.

However, to get the full benefit customers need to be in credit to the tune of 1m.

AIB were first off the mark when they introduced interest-bearing current accounts to business customers last September at a rate of up to 0.5%, since reduced to 0.25%.

Yesterday, BOI announced its belated entry into this market but seriously ramped up the competition by offering rates of up to 1%, later this summer.

Bank of Scotland are expected to come in with far higher rates which start with lower credit balances later this year.

Eddie Hobbs of the Consumers Association of Ireland said the rates paid by the two main banks pale into insignificance when compared to the 4.37% available through First Active’s current account mortgage.

Both banks are confining interest rate-bearing credit accounts to business customers who use the banks’ online services and neither have plans to extend it to personal current accounts. Interest-bearing current accounts are common in Britain and in other banking markets.

BOI’s new account will be available in early summer 2003, offering the full suite of electronic services through BOI internet banking service, Business On Line.

BOI’s director of business banking Tom Comerford said: “We currently have 50,000 registered users of Business On Line and as this increases, there are potential benefits which can be shared with our customers.

“We believe that this new electronic current account in conjunction with our extensive branch service proposition allows our customers to choose from a range of options that maximises the benefits for themselves.”

Director of the Small Firms Association, Pat Delaney, welcomed the initiative.

“Firms progressively embracing technology will derive significant cost savings and revenue opportunities and it makes sound business sense for Bank of Ireland to share these benefits with their customers,” he said.