FINANCIAL giant Nationwide is stepping up the current accounts battle by offering a higher interest account.

From November, the Old Town-based building society is opening FlexAccount, which will pay 25 times more credit interest than that offered on an account with a traditional clearing bank.

Nationwide's chief executive Philip Williamson said: "I urge anyone who's not getting a fair deal on their current account to change provider.

"Many bank accounts are not so much current accounts as relics of the past. Nationwide's generous credit interest of 2.5 per cent, low overdraft rate and the absence of unreasonable fees and charges, makes FlexAccount the perfect choice."

Explaining how the new account works, Nationwide spokesman Frank Creighton said: "The overdraft rate will remain at 9.9 per cent broadly half the level that banks charge.

"FlexAccount will pay interest of 2.5 per cent to all members who credit £1,000 or more to their account each month, and one per cent to those crediting £500 to £1,000.

"This is still 25 times and 10 times more, respectively, than the traditional high street banks.

"Unlike some banks that offer improved rates to existing account holders on application only, or make customers choose either an improved credit or overdraft rate, Nationwide's rates will apply to all new accounts and also to the society's existing 2.5 million account customers automatically. In addition, the absence of unreasonable fees or charges makes it even better value."

Research commissioned by the building society showed that 73 per cent of adults have their main current account with one of the high street banks, despite their low interest rates.

"Banks have got away with providing such poor deals because of customers' low awareness of poor rates and the lack of competition between the banks in the current account market," said Mr Creighton.

"In fact, 61 per cent don't know what credit interest rate they receive and 64 per cent don't know what they pay in interest when overdrawn.

"Nationwide is challenging the banks' dominance by offering an all round good value account.

"In addition to offering great value, FlexAccount couldn't be more convenient.

"The account can be run with a wide range of access options branches, ATMs, post, phone, internet, WAP-enabled phones, hand held computers and internet TV."