AIB has broken ranks in offering to pay interest on funds held in business customers' current accounts, but only if they switch to doing their banking online. AIB has some 500,000 personal customers, many of whom would benefit from such an offering. The bank estimates that about 25,000 of its 100,000 business customers will qualify for interest payments from September and expects this to double within 18 months.
It is an interesting initiative and one that should prompt consumers to call for the introduction of interest payments on personal current accounts. So far, Ulster Bank and National Irish Bank are the only Irish financial institutions to pay interest on a select range of current accounts. This has been standard practice in Britain for many years. Indeed, AIB has been paying interest on current accounts to business and personal customers in that market for almost five years.
The bank has argued that the regulation of bank charges in the Republic has made it less expensive for its customers to use the bank's services than their British counterparts and that it has no immediate plans to extend its terms and conditions for personal customers.
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