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
Mark Dampier: 'We're on our own in retirement. They've pulled pensions to pieces'
Questions of Cash: I don't use Amazon Prime, but my credit card bill says I do
HSBC becomes first bank to offer five-year fixed rate mortgage with interest rate under 2%
Crippling PFI deals leave Britain £222bn in debt
Pension freedoms: How to deal with cold calls from scammers
- 1 Alan Rickman admits editing 'terrible' script with friends in Pizza Hut behind backs of writers on Robin Hood: Prince of Thieves
- 2 18th century sex toy found in 'toilet of sword fighting school' in Poland
- 3 US? China? India? The 10 biggest economies in 2030 will be...
- 4 'I wish my teacher knew...': Young students share their 'heartbreaking' worries in notes
- 5 Rebecca Francis accuses Ricky Gervais of using 'influence' to target female hunters after receiving barrage of death threats
The only black face in the Ukip manifesto is on the page about overseas aid
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
Ukip is the only main political party to not address LGBT rights in its manifesto
Food banks: One million Britons will soon be using them, according to Trussell Trust
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
iJobs Money & Business
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...
£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...
£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...
Day In a Page
With space for an equestrian business, a greenhouse for growing your own veg, a wine store and a gym; this five-bedroom home has all the ingredients for a country retreat.
This four-bedroom home has exposed brick chimneys and a vaulted ceiling in a breakfast room that's ideal for summer entertaining - the doors open to the patio and garden.
The decked roof terrace of this two-bedroom flat is perfect for summer drinks while large windows and ample storage space make for a light and spacious interior.
Surrounded by approximately 15 acres of grounds, this six-bedroom grade II-listed home has been extensively refurbished yet retains many period features.
This four-bedroom home comes with a two-bedroom cottage and commercial office, with planning to extend, in a stunning courtyard setting.
In a pretty Norfolk village, this four-bedroom family home is surrounded by landscaped gardens, with even a self-contained annex for guests.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
This five-bedroom home is arranged over three floors of a converted Victorian hospital, offering spectacular views of the Pentland Hills - only three miles from the city centre.
This four-bedroom detached home comes with grounds that span to approximately 2.5 acres, as well as two large patio areas and a double garage.
This four-bedroom cottage is a Grade II-listed town house, well-located for the thriving market town of Nailsworth.
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
A boutique mews house, set around a central courtyard, with three bedrooms and a private roof terrace
A four-bedroom farm-conversion with three bathrooms and two reception rooms
A two-bedroom detached house with ensuite bathrooms and a sun-drenched decked terrace, £750,000
A modern and spacious two-bedroom, penthouse flat with two bathrooms in a prestigious development
A beautifully renovated five-bedroom terrace with three reception rooms and a courtyard garden, £700,000
A four-bedroom period house which has been extended to provide almost 2,500sq ft of living space, £675,000
A pretty three-bedroom Georgian home with a 22ft drawing room and a master suite with a balcony, £525,000