Money Insider: It's easier to switch banks - but which one is best?
Friday 13 September 2013
With the new Current Account Switch Service set to launch on Monday there is hope that more customers will finally have the confidence to up sticks and move their accounts to a new bank.
Too many people have put up with sub-standard service from their bank for too long, because of the difficulty in switching, but now it will be much easier to vote with your feet and switch to an account that mirrors the way you manage your money.
The concern, however, is that even with the new faster switching rules and switch guarantee in place, people still won't know which account to choose and may end up with a product that isn't the most appropriate for their needs.
Although each bank and building society has its own tariff and rate details clearly displayed on its website and marketing literature, working out which account is best can still prove a big headache.
The problem for consumers is that no two accounts are the same, and the difficulty in trying to compare different rates and charging structures is probably one of the major reasons that customers have stayed put.
Of course there is never going to be one bank account that works out as the best for everybody. It is more about weighing up the individual elements of banks and accounts that are important to you.
For some people a low-cost overdraft will be the priority, while others will be looking for interest payable on credit balances or a debit card offering low cost-transactions abroad.
I've carried out some research to try to establish which accounts are strongest in each of the main areas.
If a cheap overdraft is most important, then look at First Direct, Metro Bank or the FlexAccount from Nationwide Building Society.
The Post Office is currently running a pilot in 29 branches across East Anglia with a further roll out of branches expected in 2014. If it keeps the existing tariff as it is; the overdraft rate of 14.9 per cent AER is a very good deal when compared with the rest of the market.
For those seeking interest on credit balances or rewards for their custom, then for balances of £2000 or less take a look at Halifax Reward.
Lloyds TSB with Vantage and Santander 123 are tops for those with balances of £3,000 plus, with the latter being the market leader for balances above £5,000 – paying a very competitive 3 per cent gross on balances of up to £20,000.
If you're seeking a cheap debit card for use overseas then Metro Bank and Norwich & Peterborough Building Society offer this facility free, while Nationwide Building Society charges but is still much cheaper than the main banks in this area.
Picking the wrong bank when it comes to using a debit card overseas can cost you a lot more than you might imagine. For many people there is more money to be saved in this area than in other element of a bank account.
Your two-week summer holiday could easily see you shelling out an extra £50 or more in charges – for most customers that far outweighs the amount of interest you'll earn on your bank account in a whole year.
Yet for some it's not the nuts and bolts of the account that matters; all they really ask is for the ability to talk to a human being at a UK call centre 24/7 and to receive a consistently good level of customer service. Regular top performers for service are First Direct and The Co-operative Bank.
The decision to switch is not something people will undertake lightly and it is essential to choose an account that mirrors the way you run your finances rather than being swayed by short-term sweeteners.
Andrew Hagger is an independent personal finance analyst with moneycomms.co.uk
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
You'll need £220,000 for a minimum wage in your retirement
Money Insider: Would £150 make you switch banks?
Gold-plated pensions – the key to retirement freedom?
Why the City Watchdog is concerned with the credit card industry
Bargain Hunter: Find the deals that have real value beneath the Black Friday hype
- 1 Exodus Gods and Kings casting controversy: Ridley Scott would never cast 'Mohammad so-and-so from such-and-such' in lead role
- 2 This letter from a reader explains why women can’t play football
- 3 'You should come to my house and eat cheeses with me': 4-year-old sends adorable love letter to girl at school
- 4 Scientists predict green energy revolution after incredible new graphene discoveries
- 5 Michael Buerk wishes he'd killed Jimmy Savile when he had the chance - by pushing him overboard a cruise ship
Ukip says babies born to immigrants in the UK should be classed as migrants – which would include Nigel Farage’s own children
Obama: The only people with the right to object to immigration are Native Americans
The young are the new poor: Sharp increase in number of under-25s living in poverty, while over-65s are better off than ever
Tamir Rice: 12-year-old boy playing with fake gun dies after being shot by Ohio police
Sarah Vine criticises lesbian mother Jack Monroe: 'If she was unsure about her sexuality, she should have taken greater precautions'
Ukip mocked after mistaking Westminster Cathedral – for a mosque
iJobs Money & Business
£20000 - £22000 per annum: Argyll Scott International: Service Desk Analyst Re...
£20000 - £22000 per annum: Argyll Scott International: Service Desk Analyst Re...
£30000 - £250000 per annum: Recruitment Genius: A global Rolling Spot FX, Comm...
£Attractive Package: Citifocus Ltd: Chartered accountant (ACA or CPA), must be...
Day In a Page
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
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
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
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
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
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