Short-changed by your bank?

Then move your current account to a better deal. Esther Shaw on how to switch
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The Independent Online

This will almost certainly be the case if you've kept a current account with the same bank for as long as you can remember.

If you have an ordinary current account with one of the big four British high-street banks - Lloyds TSB, Barclays, NatWest and HSBC - check the interest paid on your balance if it's in credit, and the size of any overdraft charges.

Don't be surprised to find that the former can be as paltry as 0.1 per cent, and the latter as punitive as 18 per cent - with hefty extra fees for unauthorised borrowing.

With plenty of competitive offers available elsewhere, your bank is likely to be profiteering at your expense - scant reward for your misplaced fidelity. And if you've suffered from poor customer service too, it's probably time to join the 80,000 who are switching current account each month.

This is double the number five years ago, according to moneyexpert.com, a website that compares financial products, but it's still a fraction of what it could be. For today, these switchers don't make too much of a dent in the nation's 21 million current account holders.

Seven out of 10 customers still bank with the big four, says consumer body Which?. And the deals here are less than compelling. For example, Lloyds TSB, with an estimated 23 per cent of the market, offers four different current accounts paying 0.1 per cent on credit balances. Interest for an overdraft on its Classic account is 18.2 per cent.

So why aren't more of us changing? One problem is our misconceptions about switching - and in particular, the perceived hassle. Nearly half of UK bank customers surveyed for new research by Alliance & Leicester (A&L) believe it is too time consuming, while a quarter reckon it requires extensive form-filling. Others are deterred from switching because they think it is up to them to transfer all direct debits and standing orders.

But this is not the case. Recent changes to the Banking Code have made it easier for customers to move to a better deal.

"Your existing bank now has to provide the necessary details to your new one within three days of a transfer request being submitted," says Peter Marshall from moneyexpert. com. "Your new bank then ensures everything is moved over, so all you have to do is fill in the application form and sign it."

Some lenders have now set up units to deal exclusively with account switches. And now is as good a time as any to make a move. There are around 100 different current accounts and plenty of incentives to leave the big four - including a debit card paying 1 per cent cashback at the Halifax.

For their part, the banks doing the tempting want your current-account custom to cross-sell more profitable products, such as mortgages. Feel free to ignore all these, of course, but before you dive into any deal, make sure you choose an account tailored to your own needs.

For example, if you spend more time in the red than the black, an account with low overdraft charges will be more suitable than one paying high interest.

Decide if you're happy to bank online. One of the most competitive accounts available is A&L's Premier Plus, paying 4.89 per cent on balances in credit. This is an internet-based deal but with telephone and limited branch banking.

"You have to pay in £1,000 monthly to qualify, but the rate [for balances in the black] is higher than on some savings accounts," says Susan Hannums at independent finan- cial adviser Chase de Vere.

Premier Plus also has a one-year interest-free overdraft that rises to a low 7.9 per cent on both authorised and unauthorised borrowing.

Ms Hannums also suggests internet bank Cahoot, paying 4.17 per cent on balances in credit, or, for a branch-based account, the Halifax paying 3 per cent - though you must put in £1,000 a month.

For a low overdraft, Nationwide's Flex account charges 7.75 per cent on authorised borrowing.

Alternatively, you could try a packaged current account. For a monthly fee, these offer you a bundle of services including free travel insurance and breakdown cover. But critics rubbish these perks, and recent estimates suggest that 7.7 million "big four" customers pay as much as £180 a year for benefits they may not use.

THE BEAUTY OF MOVING

It's a family affair. Judy Shippey, from Melton Mowbray in Leicestershire, was so pleased with her new current account that her two daughters are now following suit.

The 42-year-old, who works as a receptionist in a beauty salon, left Lloyds TSB to join Alliance & Leicester five months ago.

Her switch was prompted by a need for a good savings account - and customer service played a part too.

"I received some money from an insurance payout and wanted to find a decent-paying account to put it in," she says.

"When I visited different banks to get some advice, the staff at my local A&L branch were by far the most helpful."

On the back of this, she opened a Premier current account, which has a linked savings account - the PlusSaver, paying 4.5 per cent - and also offers 2.1 per cent on balances in credit, with an interest-free overdraft for a year.

"I have to pay in £500 a month but I have [free] travel insurance, and it's easy for me to access my account over the internet."

The hassle-free switch encouraged daughters Rebecca, 19, and Naomi, 22, to do the same.

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