Switching current accounts: Five things you need to know about getting the best deal

Banks are boosting their profits by millions of pounds through consumer confusion

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The Independent Online

Have I got the right current account?

Probably not. A report published this week suggested that comparing current accounts to find the best value is now almost impossible

But doesn't that mean banks are boosting their profits by millions of pounds through consumer confusion?

That's about the size of it. Tesco research suggests 55 per cent of people find it impossible to determine the value of their account, in terms of cost and what they receive in return. Many find it tough to make comparisons on overdraft fees, charges and credit interest. Meanwhile, only 14 per cent of consumers believe there are large differences between current accounts".

Are there differences?

There certainly are. Some accounts pay a decent interest on credit balances, for instance, while others pay none. Meanwhile, some charge daily overdraft fees while others have monthly charges or set fees.

So how am I meant to work out which is the best account for me?

With great difficulty, which is the problem. If you keep a lot of money in your account then you may be better off with the one that pays the most interest, although with some accounts including other benefits, you may be better off choosing one of those. If you go into the red then it's even more important to find the right account – one that charges you the least for your type of borrowing. For instance, a £100 fee-free buffer could mean avoiding all charges.

So what can be done about the problem?

"People need a simple way to compare all the separate elements of a bank account," said Andrew Hagger of Moneycomms. Tesco has passed its evidence on to the Competition and Markets Authority, which is currently investigating the current account market. The CMA is set to report later this year and hopes are high that it will demand a shake-up to make accounts easier to compare and ensure banks play fair with customers and don't confuse them into staying in the wrong account.

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