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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 09:26

The Friday Five: how to switch your bank account

Britain’s biggest banks are not all that popular right now. Broken IT systems, interest rate manipulation and mis-selling scandals will do that to an industry.

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.

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4 comments so far. Why not have your say?

Jonathan

Jul 13, 2012 at 14:46

By switching you are saying one bank is better than another. But they are all the same.

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DC

Jul 13, 2012 at 17:07

I spent 44 years with LLoyds (TSB) and was of no value or interest to them whatsoever. I finally made the move to the internet bank with the highest customer rating, First Direct. The switch was utterly painless and their friendliness and helpfulness was so refreshing. Plus of course they give you £100 for switching to them.

Lloyds TSB never contacted me - which says it all about their attitude to loyal customers.

As a postscript we are still getting circulars from LLoyds to the people we bought our house off 22 years ago. What a useless bank they are.

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Keith Simmonds

Jul 14, 2012 at 09:10

Since we switched from Santander to Nationwide in June life has been much calmer. I really do not think Santander have sorted out the merger with Alliance & Leicester with many problems still not being addressed. Nationwide just quietly and efficiently do their job without any drama or high pressure sales.

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invsb

Jul 14, 2012 at 17:11

Jonathan - I've had my current account at 5 different banks and I've worked at 2. They are not all the same.

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