Would you switch current account for £70?
Many Britons grumble about service, rates and branch closures, but stay loyal to their banks. Thanks to the current account switch service, it's far easier to switch to a rival bank and disgruntled customers are ready to move on.
The service was designed to boost competition in the banking sector by allowing people to switch all their banking, including salary and direct debits, in just seven working days (against up to 30 days before).
It also guarantees a refund of any lost interest or charges incurred if something goes wrong along the way.
Almost three million people have switched since the service was launched, although this is still a fraction of the UK’s 65 million current accounts.
The average person will save £70 a year by switching, according to the Competition & Markets Authority. Is it worth it?
Although switching your current account is far easier than it was, it isn't completely hassle-free.
First, you have to compare the various rival accounts on the market to find which is best for you. You then have to complete your new bank’s account application form and a switch form.
Your new bank will handle all the rest, including switching over your direct debits and standing orders, salary payments, and so on. If you have an overdraft, make sure your new bank will accept it, and it will also be transferred. You can even name your switch date although you cannot transport your existing bank account number.
Easy as 123
If you are unhappy with your bank, switching is worthwhile.
Some will save a lot more than £70, especially those with savings earning pitiful interest.
The popular Santander 123, for example, pays 3% a year on balances between £3,000 and £20,000, worth up to £600 a year. The account also offers up to 3% cash back on everyday household bills. In return, you have to pay a fee of £5 a month, fund the account with at least £500 a month and have a minimum two direct debits
Santander has been the big winner in the switching game over the last two years.
Halifax and Nationwide have also won new customers. Nationwide FlexDirect pays five per cent on up to £2,500 if you pay in at least £1,000 a month, but just 1% after 12 months.
Halifax Reward pays you a £100 joining fee plus £5 every month if you pay in £750 and have two active direct debits. Tesco Bank has also been popular.
RBS/NatWest, HSBC and Lloyds Bank have lost most customers over the last two years, with Barclays faring worst of all losing almost 200,000, despite its new Blue Rewards programme.
While most people wouldn't switch purely to save £70 you might save more and best of all, can finally stop grumbling about your bad old bank.