At an early age, we choose a high-street bank and stick with it for the rest of our lives despite poor interest rates or below par customer service. But why?
Research from Santander last year showed that more than half of all adults in the UK (57 per cent) have kept the same current account for more than a decade.
What’s more, almost one in five UK adults (18 per cent) have stayed loyal for more than 30 years.
But there’s a war on the high street at the moment as banks battle it out for your business by offering current account incentives.
So if you’re thinking about a change, now is the time to do it.
What’s on offer
Santander
If you switch to the Preferred Current Account you’ll receive £100 cash back. The account pays 5 per cent interest on balances up to £2,500 and there’s 0 per cent interest on overdrafts for 12 months and then 50p a day, capped at £5 a month. You need to pay in £1,000 a month in to qualify and this offer runs until the end of February 2012.
Halifax
Halifax is offering customers £100 cash, paid upfront, when you switch to the Reward Current Account. The overdraft charges are set at £1 a day up to £2,500 and then £2 a day. Customers need to pay in £1,000 a month to qualify.
HSBC
HSBC has launched a January sale offering 6 per cent interest on certain current accounts for 12 months on balances of up to £2,500. The eligible accounts are the HSBC Premier, HSBC Advance or the HSBC Bank Account. This offer is subject to a minimum deposit of £500 a month.
First Direct
The First Direct 1st Account offers £100 cash as a switching incentive. Even better, if you are not happy with the account after six months they offer another £100. There is an initial interest-free overdraft of up to £250 and the minimum deposit is £1,500 per month.
The Co-operative Bank
Existing Co-op current account customers can enjoy interest-free overdraft until April to help ease the New Year financial squeeze. The offer applies to all accounts with an agreed overdraft.
Case study
Victoria Tuck, 25, a regeneration consultant from Bristol, was paying up to £35 a month in charges on her Halifax Reward Account.
This included £1 a day in charges on a £1,300 overdraft and the £15 monthly fee.
After shopping around she decided to switch to the Santander Preferred account before Christmas.
The account does not charge any fees or ¬interest on agreed overdrafts for the first 12 months and after that has fees capped at £5 a month.
She says: “It’s such a relief to be able to start paying my overdraft off.
“It was so much easier than I thought it would be, I should have done it ages ago.”
How to switch to another bank
Most banks and building societies offer a switching service to help you move.
You’ll need to provide a few pieces of formal ID and proof of income if required. Your new bank will then take care of the switch, even moving direct debits and standing orders to the new account.
Before falling for the lure of a switching incentive such as a cash bonus, check the account’s credentials to make sure you’re getting the best deal in the long run.
And don’t forget, you can always switch again if the service isn’t up to scratch. So why not compare current accounts today?
