If you've had the same current account for as long as you can remember, you may be missing out. Here's why you should get a better bank account
Moving your money could get you better banking and customer service, through to monthly rewards and higher interest rates. Plus there are some huge cash bonuses on offer for switching completely.
Here’s are my top reasons for putting this at the top of your to-do list.
Switching banks is easy and profitable
Switching from one bank to another is really simple. Most UK banks use the Current Account Switching Service to do this, which moves all your money and payments in and out to your new account in seven working days, then monitors any future payments in and moves them over too. On top there’s a guarantee that you’ll be compensated if something goes wrong.
"Once you've switched you can do it again and again to get even more of these bonuses"
In return, you can pick up bonuses of up to £200—though you will have to close your old account completely to qualify for the free cash. Offers come and go, so check online for the latest promotions.
But there’s no reason why once you've switched you can’t do it again and again to get even more of these bonuses.
You can have more than one current account
Switching isn’t your only option when looking at a new bank. There’s no limit on how many banks you can have a current account with, and many will let you have additional accounts on top of your first.
You can spread your money out across multiple current accounts
The only potential barrier to opening these extra accounts could be your credit report, as you’ll usually be credit checked when you apply. For most people that’s not going to be an issue, though it makes sense ot space out applications every few months or so and avoid it for six months before remortgaging.
Having your money in one account is risky
But why would you want more than one? Well, the primary reason is it protects your access. Having all your money in a single institution can be a problem if something goes wrong.
"Having all your money in a single institution can be a problem if something goes wrong"
Though rare, online and app banking can experience downtime, which is no good if you need to make a transfer. Sometimes accounts can be frozen, or cards lost, and again having money elsewhere you can easily get to while you sort it out.
You can make some regular extra money
Additional accounts can also get you access to a number of benefits. You might have to meet some requirements to trigger the bonuses, such as pay in a set amount each month or have a couple of direct debits leaving the account. But these are easily managed.
The only issue you might find is that some will require you to bank online or with your phone. Sadly if this is the case you will lose out.
My top ways to get money from your bank are:
High savings rates
The highest interest rates on savings are usually reserved for current account customers. First Direct has a seven per cent AER paying regular saver, while Barclays offers 5.12 per cent AER on up to £5,000. And there are more at Lloyds, HSBC, Santander and others.
Check the savings rates across various banks
It’s possible to open up current accounts at these a number of these banks to access those rates, and use them purely for savings.
Quite a few banks will give you cash or freebies if you have an account with them. My top picks are the Halifax Reward which offers £5 a month and Club Lloyds which gives you six free cinema tickets each year.
Cashback on bills and spending
Cashback is a great way to make money on your existing spending. Santander will give you cashback on bills with its 123 or Edge accounts, while Chase Bank offers one per cent back on most debit card spending for 12 months.
Reduce your overdraft
This one isn’t quite a money maker, more a money saver—but it could be massive. If you ever use your overdraft then most banks will charge you around 40 per cent if you do go into the red, making it one of the most expensive ways to borrow.
"A handful of banks will provide a zero per cent buffer"
But a handful of banks will provide a zero per cent buffer. Until spring 2023, HSBC and First Direct customers can ask for a £500 interest-free overdraft that’ll last 12 months, while new Nationwide FlexDirect account holders can get a larger overdraft at zero per cent, also for one year.
You could switch to these, or open one up a a new account and transfer the debt over. Just make sure you try to clear it before the charges restart.
Gain access to branches and better customer services
An average of 54 branches close every month (according to Which?), driven by the move to online banking, with footfall drastically down in recent years.
But if you still require, or just prefer, popping into a branch, it could be the only way to do this is to change your bank. Again, you don’t have to switch to achieve this. You could just open a new account at whichever bank is still in your area.
An average of 54 bank branches close every month due to the move to online banking
Or even if you’ve gone fully online, you might find you can get better customer service, shorter wait times and more comprehensive apps by ditching your existing bank. My personal favourite for customer service is Nationwide, while my top app is Starling.
Better manage your money with someone else
Everyone manages their money differently, but whether it’s a partner, parent, child or someone you care for, there are benefits to having both a joint account and a personal account.
It’s important you have access to your own money, but paying joint expenses out of a joint account can make life a lot easier.
Some banks, such as Starling, Santander and Lloyds, will also allow you to have an additional card with limits on spending. This is particularly handy if you’re caring for someone and they need to give you access to some but not all their cash.
Read more: How to get out of debt for good this year
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