Two new current accounts have been launched by Santander today (February 28th) – the Preferred Current Account and the Everyday Current Account.

The former will pay five per cent in-credit interest rate on balances up to £2,500, plus a free arranged overdraft for customers who transfer their main account to the bank.

Meanwhile, the latter is a simple product that is available to all customers, who will be able to use it in branch, online and by phone.

Nici Audhlam-Gardiner, Santander's director of banking, said: "The launch of these two new accounts marks a pivotal moment in Santander's ongoing aim to provide easy to understand current accounts for a wide range of people and to simplify overdraft charging."

She added it will continue to offer the flagship Zero current account for customers who have a mortgage, savings or investment with Santander.

Kevin Mountford, head of banking at moneysupermarket.com, suggested the product offers one of the cheapest overdrafts on the high street.

Use the Myfinances.co.uk comparison tools to find the best deal on a new bank account