Why switching banks is good for your bank balance

Sam Jackson

March 10, 2014

November 13, 2018

Why switching banks is good for your bank balance

 

Consumers are finally waking up to the fact that loyalty is misplaced in the banking sector, and as a result there's more to be gained from switching than ever before. Breaking up with your bank can seem daunting, but it's easier than ever to switch and better for your financial health if you do!

You won't be the only one

In 2011, the Independent Commission on Banking found that people only switched banks once every 26 years. In response, a switching service was launched in August 2013 to help people switch current accounts in seven days or less. Hundreds of thousands of people have traded accounts. And more are doing so every day.

It's a clear sign that there are benefits to be had by comparing banking suppliers, whether on current accounts, savings, credit cards or loans. Here's our list of the best reasons to make the switch...

Boost interest rates

Savings accounts can vary hugely between banks, and they may also change depending on how much money you have, and how much you will deposit on a monthly basis. ISA accounts also tend to push your funds over to low-interest accounts once the initial three to five year term expires, so always make sure you're getting the best rates.

Remember, some current accounts also offer surprisingly good in-credit interest rates too. Santander's 123 account and the Lloyds Classic Account both offer up to 3%.

Reduce interest rates

If you have a mortgage, personal loan, or credit card, you could reduce your interest payments by switching, and our online comparison tool can help you find the best rates.

Switching can be particularly lucrative if your circumstances change. Especially, if you've paid off a large chunk of your debt, or have more cash. So even if your current provider had the best deals when you signed up, they might not suit you now. To keep track of how much money your lower interest rates are saving you, use our free Money Dashboard budgeting software, which keeps a clear record of your incomings and outgoings, all in one place.

Cash rewards

If interest rates aren't your priority, banks like First Direct are giving switchers £100 in cash when they sign up. So if you're just tired of your current bank, you can earn money by trying someone new and help you get more in line with your budget.

The Telegraph recently summarised the best bank account switching offers which will give you a good idea of what is available.

Extras

While some banks and building societies are offering 'premium' accounts, which give customers extras like breakdown cover or travel insurance, others offer these as free perks. Nationwide's FlexAccount currently offers free European travel insurance and a loyalty scheme to give customers discounts on certain brands.

Money Super Market has a great current accounts with benefits resource for you to digest when you have time to sit down and look at all the current offers available on bank accounts which promise added extras. 

Specialist services

It's important to remember that you don't have to keep all of your services with one provider. Your current account provider may offer incentives to sign up for a credit card or mortgage with them, but if not, look elsewhere.

Some banks target certain customers. Banks like TSB, for example, are billing themselves as personal loan and mortgage experts, and some credit card providers exist solely to provide a credit card. This could mean their rates will be more competitive, and also that they offer additional peripheral services like advisors, online functionality, 24-hour phone lines or customer service from abroad. So make sure you're taking advantage of what specialists have on offer.

And just as there are now switching services to make changing current accounts easier, there's budgeting software to help you keep track of multiple accounts. Our Money Dashboard service is a secure way to combine all of your accounts and passwords into one simple interface, giving you a clear view of your finances across as many providers as you like.

 

 

Sam Jackson

Money Dashboard

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