Money Insider: Forget the spin and pick the best account for you
Saturday 26 June 2010
Cut through the marketing spin and choose a current account that's right for you.
Virtually everyone has a bank or building society current account, but despite all the high-profile advertising of headline rates and special deals, do you really know which account is most suitable for you?
As with most things in life it's not as straightforward as one current account fits all. In fact I can think of at least four main areas to consider if you're in the market for a new bank account.
This is the angle that some of the providers use to tempt you to sign up as a new customer. However these days receiving interest on your current account balances has become a bit of a rarity. Both Santander and Alliance and Leicester will pay you 5 per cent, but it's worth noting that the attractive rate is just for the first 12 months, and only on the first £2,500 of your balance. So while you could earn a maximum of £100 (after tax) in year one, the most you could earn in subsequent years when the rate drops to 1 per cent is a far less enticing £20.
On the other hand the reward account from Halifax will give you a net payment of £5 every month as long as you pay in at least £1,000 into your account. This is not a short-term offer, nor does it depend on you keeping a specific balance in your account. A word of warning though, whilst it's a good option for credit balances, if you dip into overdraft from time to time, then the daily overdraft charges will soon wipe out your £5 monthly credit.
If you find that your account swings into the red each month, maybe in the week before payday or whilst you're waiting for your expenses to be paid, then you need to focus on the charges for going overdrawn. Again you can get 0 per cent for the first 12 months if you switch to Santander, Alliance & Leicester or Barclays. For a longer-term deal then Cahoot at 11.8 per cent, Santander at 12.9 per cent and The Co-operative bank at 15.9 per cent are the most competitive for authorised borrowing on your current account.
Debit card charges abroad
This is an area that people tend to overlook when comparing accounts, but if you're a regular traveller overseas, then it's something worth thinking about. For example, if you go to Europe three times in one year and make two £100 currency withdrawals and two £100 debit card purchases each trip, it would cost you a total of £53.88 with Lloyds TSB or £52.50 with NatWest, whereas if you had a Nationwide Building Society flex account there would be no charges to pay. So if you're often holidaying abroad, perhaps with your own home in the sun, this could be the basis on which to choose your bank account.
Away from the nuts and bolts of how much you can earn or how much you'll be charged, all that some people want from their bank is a reliable and consistently good level of service.
Whilst the big high street banks don't fare well in this area when you look at the surveys from the likes of BBC Watchdog and the media, you'll regularly see the likes of First Direct, Smile and The Co-operative bank at the top of the list for customer satisfaction.
So if you've remained loyal to your bank since you first started work, maybe this has given you some food for thought and perhaps the impetus to move to an account more suited to the way you manage your finances.
Borrowers looking for a new home loan will be disappointed to learn that the excellent five-year fixed rate mortgage from Britannia and Co-operative bank has been pulled following heavy demand. It's not surprising as the sub-4 per cent rate was outstanding in today's market. However at the time of writing it is still possible to get a five-year fix from Chelsea Building Society, also at 3.99 per cent, to 75 per cent loan-to-value and with a very reasonable product fee of £495.
Shorter-term fixed deals are still getting cheaper as competition between lenders remains fierce. Yorkshire Building Society is holding top spot with 2.89 per cent and £995 fee, while The Co-operative bank is not far behind at 2.95 per cent and £999 fee, both available up to 75 per cent loan-to-value.
The credit card market has been more active during the last few months, with more introductory interest free deals reappearing. This week Nationwide Building Society launched a 0 per cent balance transfer deal for 15 months, an excellent opportunity to restructure and reduce your borrowings and just shy of the longest interest-free deal of 16 months from Yorkshire Bank and Clydesdale Bank.
Andrew Hagger is a money analyst at Moneynet.co.uk
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Buyers beware of new-build home headaches
Five Questions: Changes to car tax discs
Bargain Hunter: There's one day left to book a bargain flight with Air Asia
A student's guide to financial survival: You don't have to drown in debt at university
How to save money: UK is crashing down the European league table for putting money away
- 1 Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
- 2 Joan Rivers: 'Palestinians deserve to be dead'
- 3 Lady al-Qa’ida: On the trail of Dr Aafia Siddiqui, the world’s most wanted prisoner
- 4 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
- 5 It's not just the savagery of Isis that is shocking – its weaponry is too
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Scottish independence TV debate: Pumped-up Alex Salmond bounces back in bruising second round against Alistair Darling
Do you realise just how foolish the UK looks?
With Douglas Carswell joining Ukip, my party has taken another giant step forward
- < Previous
- Next >
iJobs Money & Business
Highly Attractive Salary: Austen Lloyd: BRISTOL - This is a very unusual law c...
£35000 per annum: Harrington Starr: Network Engineer (CCNP, CCNA, Linux, OSPF,...
£50000 per annum: Harrington Starr: DevOps Engineer (Systems Administration, L...
£60000 - £70000 per annum: Harrington Starr: A prestigious leading professiona...
Day In a Page
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony