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Many customers never switch their current account and are seemingly content to stay with the same provider. However there are a number of reasons why switching your account could deliver real benefits.
Switching your current account is easier than you might think. Furthermore you could benefit financially from switching, or you may find that banking elsewhere is more convenient. Most customers shop around for mortgages, savings and life insurance, so why not shop around for your current account as well? Here we look at five ways you may benefit from changing your current account provider.
The scope of the online banking offering
24 hour access to information and the ability to transfer funds quickly at the click of a mouse are standard features of an internet banking package. But look more closely and see which banks offer the following, and how good their offering is in each area:
- Availability of security software: some banks offer this free to all online customers.
- Email and text alerts: some banks will let you know if your balance is sufficiently low to be of concern.
- Additional products and services: some banks may offer their online customers certain products that are not available to other customers, or offer beneficial interest rates to online customers.
- Mobile banking: with some banks you can download an application to your mobile phone which allows you to check balances, view recent transactions, transfer money between accounts or find your nearest branch or cash machine.
Interest rates
At times of very low base rates, some current accounts do not pay interest. You might therefore consider transferring to a provider that offers current account interest, although here an attractive interest rate may only be paid on the first £3,000 or so, with a much lower rate applying to the remainder. Also consider that the provider may only pay the enhanced rate if payments are made to the account every month. Overdraft terms may also be less attractive in higher interest accounts.
Overdraft charges
Overdrafts are charged at fairly high rates of interest, sometimes higher than those on credit cards, so it can pay to find the best terms on overdrafts. It is likely that there will be some providers offering interest-free overdrafts for a period of time, such as 12 months, or up to a certain amount, such as £250. For unauthorised overdrafts you can still expect high rates of interest.
Services at your local branch
You may wish to consider banking with a provider that has a branch nearer to your home or place of work, offers a wider range of services from your local branch, or has a local branch that is open for longer. It is impossible for all banks to offer their full range of services in all branches, but customers should expect as many branches as possible to open on Saturdays, and for as many as possible to offer services such as cash machines, personal financial advice and currency exchange.
Differences between packaged current accounts
Most banks now offer packaged accounts, in which a current account is the core product, but in return for payment of a fixed sum per month, you receive a number of additional benefits, usually including several insurance products. By comparing providers, you may find that one bank’s packaged account offers better value for money than another, or offers a range of associated benefits that you find more attractive.
The most common types of insurance offered here are breakdown, identity theft, mobile phone and travel insurance. Other incentives may include interest-free overdrafts and preferential rates on savings accounts or credit cards. Some packaged accounts also offer non-financial products, such as free DVD rentals or music downloads; or discounts on eating out and live entertainment.
A bank may have several different levels of packaged account, and by paying a larger monthly subscription, you receive additional benefits. The bank may restrict some of the options with the highest subscriptions to customers with a high income, or with a high level of savings with the same bank.
