Switching your current account – is presumably not on top of your list of things to do. The big banks may be tumbling over themselves to offer a deal that will convince you to switch, but is it actually worth the effort?
The answer is yes if a bank or building society can offer:
- Better service
- A higher interest rate
- Lower overdraft charges
- Additional services, including roadside breakdown assistance or travel insurance, which make it more economical to switch
Switching current accounts is easy
Banks and building societies would want to build a lasting relationship with their clients. So it is in their interests to have your current account transferred quickly and hassle-free.
Many bigger banks and building societies suggest a committed switching service to shift all your regular direct debits and standing orders across, and now, thanks to the Current Account Switch Service, it is easier and quicker than ever before.
Banks and building societies that are part of the design have a responsibility to switch your current account within seven working days. If it takes longer or if things go wrong and you experience a financial loss as a result – for example, if a direct debit ends up being unpaid and you are charged a fee – they must offer you a refund.
Cashback for opening a current account
Still unconvinced? No worries – here is £100 for your trouble! That is what some banks are extending at the moment if you switch your current account to them.
It’s not all about the cashback though…
Cashback is great – but it is not how you should choose your current account.
Think about how you make use of your current account:
- Are you always in your overdraft? If so, you will want an account with low fees and charges.
- Do you always retain your account in credit? Then you will want an account that pays a high-interest rate.
- Would you like extras such as mobile phone cover, travel insurance, etc.? Watch out for packaged accounts that can accommodate.
Current accounts with benefits
Increasingly, we are being directed away from free banking and towards ‘packaged’ current accounts. These accounts give ‘free’ services such as offers, travel insurance, and even special mortgage or loan rates, in return for a monthly fee.
While looking at the fee, you need to consider the personal value of all these additional benefits to check if the current account is worthwhile. For instance, if breakdown cover is offered and you do not have a car, it is not worth anything to you, is it? Or if a multi-trip travel insurance is proposed, but you only go away once a year, it may be more practical to have an account that does not charge a fee and just avail of a travel insurance for when you need it.
However, benefits of a current account can save you money. If you pay separately for a mobile phone cover, roadside breakdown assistance, and travel insurance, for instance, you might save money by making use of the products that are offered with your current account.