Unreasonable charges, low interest rates, and long queues have been irritating high street bank customers for years. But could supermarket bank accounts be the answer?
With Tesco getting ready to launch their own current accounts this year, it's worth asking the question: would you trust a supermarket with your cash? Or should they stick to the things they know, like tiger bread and BOGOF deals?
As things stand at the moment, there's a pretty even split between people who would consider banking with a supermarket and those who would rather stick to the high street. One in five Brits are currently unhappy with their bank, but almost half would rather stay where they are than switch to the new bank on the block.
Of course, this means that more than half of them have been tempted to switch. Whether supermarket current accounts could become a real threat to high street banking remains to be seen, but it's clear that supermarkets do offer some advantages.
Supermarkets have a proven record
It's been more than ten years since the first supermarket started offering insurance policies to shoppers. Now Tesco Bank has just opened its seven millionth customer account, and both Tesco and Sainsbury's have been going from strength to strength since severing ties with the banks that partnered with them (RBS and Lloyds, respectively).
They offer great value
Both Tesco and Sainsbury's offer some of the most competitive personal loans in the industry. At the moment, M&S is the only supermarket to offer a current account, but they're already pleasing crowds by offering much later opening hours than typical high street banks. When it comes to saving money, M&S are also at the forefront. The rates on their savings accounts are always in the top 20% of the industry.
It's easier than ever to switch bank accounts
The Switch Guarantee launched last September, making it easier for current account holders to switch to a new bank account. The programme guarantees that your account will be switched within just seven days, and after that a 13 month redirection is placed from the old account to the new, in case any accidental payments are made. Just remember to add the new account details to your budget planner so that you can still see what your money's up to.
Supermarket banks reward loyalty
Sainsbury's Finance offers Nectar points on their products, as well as discounts if you buy financial products from their website. It's speculated that Tesco will follow suit, with a current account that will be linked to the Clubcard. At the moment, Tesco credit card customers collect Clubcard points on their purchases. It's a good way to encourage customer loyalty, as well as helping people with their own household budgeting by offering discounts on shopping and days out.
Posted by Marc Murphy, Marketing Manager at Money Dashboard.