Money Talk: Make banks do your bidding

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The Banking Ombudsman, the complaints watchdog, once told me that despite their customer service efforts, he doubted banks would ever be popular. So the findings of a survey in this month's Which? magazine may not be surprising.

Too many banks continue to fail to satisfy. While there is good news in the significant fall in mistakes experienced by the 4,000 account-holders surveyed, the "big four" continue to score poorly compared with other banks. The lowest ratings go to Barclays and NatWest (and the smaller Clydesdale in Scotland), where only a third of account-holders are "very satisfied". Top for happy bankers are First Direct, Alliance & Leicester and the Co-op, and the first two are also rated "best buys" by Which?

With mistakes down, the most common gripes concern impersonal service, inadequate facilities, high charges and poor interest rates.

So why don't account-holders switch? Because they fear the hassle factor of switching payments and the potential for transitional cock-ups.

The trick in switching is not to burn your boats. Rather than trying to transfer everything at once to a new bank, simply go and open the new account and run the two in tandem for a while. With new payments, direct debits and the like, set them up through the new account. Only when you're happy, start transferring the rest across.

Once you have the new account up and running, your bargaining position with the old bank will also be that much stronger. The next time it screws up, simply explain that you already have a new account to which you can transfer all your affairs; what are they going to do about it (try financial compensation)? If your old bank is happy to let you walk, so be it. You still have a functioning (and hopefully better) bank account.

The Bank of England's surprise decision to put up interest rates to 7.25 per cent last week appears to have caught mortgage lenders on the hop too, to judge by the lack of immediate moves to put up rates. But go up they surely will - at least on variable-rate mortgages. By contrast, fixed-rate offers remain about as cheap as they ever have been, thanks to the expectation that a few years out interest rates will fall again. For people looking at taking out a loan or remortgaging now, two- or three- year fixes seem a good bet. To help your decision, the Independent on Sunday has its free 27-page Guide to Mortgages, sponsored by Barclays Mortgages. Call 0800 585 691.