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The Friday Five: how to switch your bank account
Recent scandals have led many to consider leaving their bank. If you're thinking about switching, here's what you need to know.
by Victoria Bischoff on Jul 13, 2012 at 09:26Follow @VBischoff
Unsurprisingly – as people protest in the only way they know against the banks' recent misdemeanours – we’re seeing a big increase in activity in the current account market.
If you’re considering switching bank accounts, here's what you need to know before you jump ship.
1. Do you need to switch?
It’s fair to say the recent string of banking screw-ups have not gone unnoticed. Joe Public is livid, and rightly so.
But before you make a moral stand and uproot your money, it’s important you don’t, for lack of a better expression, cut off your nose to spite your face.
First, we don’t yet know how widespread the rate-rigging scandal is, so if you’re an otherwise happy Barclays customer, for example, you might want to hang fire until we know exactly which banks aren’t involved. And although RBS does indeed have a lot to answer for, it certainly isn’t the only bank to have experienced serious technical difficulties in recent years.
So, although switching accounts is to be encouraged – especially given the present lack of activity in our current account market, don’t do it just for the sake of it. If you’re on a good deal and are happy with your bank’s service, you might be better off staying put.
2. Finding the right account for you
We all need different things from our current account.
If you’re always in credit you might want an account that offers a competitive interest rate or a cashback incentive.
Both First Direct and Halifax, for example, are currently offering new customers a £100 switching bonus – First Direct will even pay out another £100 if you switch away again within six months. Santander’s 123 account, meanwhile, pays cashback on household bills and interest on balances in exchange for a £2 monthly fee.
However, before you switch it’s important you check you meet the eligibility criteria – Halifax, for example requires you pay at least £1,000 into your account each month, while First Direct demands £1,500.
Those who regularly go overdrawn, on the other hand, will be more interested in the overdraft charging structures. And then there are also packaged current accounts, which charge a fee in exchange for extras such as travel insurance or breakdown cover.
More about this:
More from us
- Five current accounts that could save you money
- 10 reasons why we don’t switch bank accounts
- Q&A: your rights following the Natwest and RBS banking disaster
- Q&A: what is Libor and what did the banks do to it?
- Banking scandals: time to switch account?
What others are saying
- Move Your Money UK
- Where can you turn if you are fed up with the big banks? We round up the rivals that offer something a little different
- Which? article on alternative to big high street banks
- The Financial Services Authority
- Financial Ombudsman Service
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