Money Insider: Don't let short-term perks decide your bank account

 

Competition for current accounts intensifies ahead of faster-switching guarantees.

With a little over two weeks until the new faster-switching rules come into play for people looking to transfer their bank account, it's no surprise that the banks are pulling out all the stops to maintain their slice of the current accounts market.

The latest move in the war to win over customers from rival banks comes from Halifax.

On Tuesday it announced a new Cashback Extras programme, where account holders can earn up to 15 per cent cashback via personalised offers from high street retailers including Morrisons, Argos and Homebase.

The scheme will launch in late September and will be available to customers who use online banking or mobile banking.

This move follows hot on the heels of an increased £125 welcome payment from First Direct and the recent 1 per cent debit card loyalty cashback deal from NatWest and Royal Bank of Scotland.

With savings of between 5 per cent and 15 per cent on offer, it's certainly an eye-catching promotion from Halifax, no doubt keen to make a noise as the current account war gathers pace, but only time will tell if the deal lives up to its promise and is enough to prevent customers moving to rival providers.

With the faster-switching rules due to kick in from 16 September there's a good chance we'll see more incentives and sweeteners as well as short-term promotional deals on overdrafts and credit balances as banks look to gain new custom and hold on to existing account holders.

This frenzied activity may look like positive news for consumers. However, a short-term or one-off incentive shouldn't be your sole reason for choosing a new bank account.

It's more important to take a long-term view and choose an account that reflects the way you run your finances.

You need to consider what would benefit you most – a cheap overdraft, credit interest, cashback or a cheap or free debit card abroad – unfortunately it's not a straightforward decision as the banks' offerings and tariffs vary widely.

Although the speedier switching process and the new customer guarantee could be the catalyst to get more people to ditch their bank account in search of something more suitable, many others simply won't switch because they don't know which account is best for them.

With a range of different rates and charges for accounts whether you're in the red or in the black, it's not a simple task for consumers to pick the bank account that fits the bill.

Some banks charge interest for overdrawn balances whereas others charge daily/monthly fees – this is just one of the many areas that makes account comparisons a nigh-on-impossible task for the man on the street. I also think many people will remain with their current provider because despite the best efforts of the marketing and advertising departments, deep down they still view all banks as much the same.

For other customers it will be less about the nuts and bolts of the individual bank accounts and more about a consistent and reliable service.

A good level of customer service from your bank counts for a lot, particularly when you have an issue on your account that you want to resolve in a hurry.

I've been frustrated by my own bank recently when I was faced with having to go through "push button" hell before eventually speaking to someone who was following a pre-prepared script in an offshore call centre.

All most of us want to do is speak to a human being to explain our query and for them to sort it out for us promptly and with the minimum of fuss. I don't know about you, but that sort of service would win hands down against a few extra pounds in cashback for me any day of the week.

Andrew Hagger is an independent personal finance analyst from moneycomms.co.uk

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Sport
football
News
Hillary Clinton comments on viral Humans of New York photo of gay teenager
Arts and Entertainment
The gang rape scene in the Royal Opera’s production of Gioachino Rossini’s Guillaume Tell has caused huge controversy
music
Sport
wimbledonScot will face Ivo Karlovic next
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Sales Assistant / Buyer

    £15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

    Recruitment Genius: Customer Service Advisor

    £15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

    Recruitment Genius: Compliance Manager

    £40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

    Day In a Page

    Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

    Is this the future of flying?

    Battery-powered planes made of plastic, and without flight decks
    Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

    Isis are barbarians

    but the Caliphate is an ancient Muslim ideal
    The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

    Curse of Brink's Mat strikes again

    Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
    Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

    'The ministers talk to us about miracles'

    Why Greeks are cynical ahead of the bailout referendum
    Call of the wild: How science is learning to decode the way animals communicate

    Call of the wild

    How science is learning to decode the way animals communicate
    Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

    'The economic collapse has happened. What is at risk now is democracy...'

    If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
    The science of swearing: What lies behind the use of four-letter words?

    The science of swearing

    What lies behind the use of four-letter words?
    The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

    The Real Stories of Migrant Britain

    Clive fled from Zimbabwe - now it won’t have him back
    Africa on the menu: Three foodie friends want to popularise dishes from the continent

    Africa on the menu

    Three foodie friends want to popularise dishes from the hot new continent
    Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

    Who will fill Donna Karan's boots?

    The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
    10 best statement lightbulbs

    10 best statement lightbulbs

    Dare to bare with some out-of-the-ordinary illumination
    Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

    Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

    Briton pumped up for dream meeting with world No 1
    Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

    Nick Bollettieri's Wimbledon Files

    It's time for big John Isner to produce the goods to go with his thumping serve
    Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

    Dustin Brown

    Who is the German player that knocked Nadal out of Wimbeldon 2015?
    Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

    Damien Martyn: 'England are fired up again, just like in 2005...'

    Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test