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COMMENT
If you're in the market to switch current account, now's the time to do it. There seems to be a serious battle going on, with banks and building societies doing everything they can to tempt you away from the big, High Street names. What's more, there's money to be made, too! Smile is offering £25 to new customers until the end of July, and Smile current account holders can earn themselves £25 for recommending a friend. First Direct and Lloyds TSB are both offering £50. And Alliance & Leicester will pay £50 to any account holder who recommends a friend, plus, your friend will receive £75 (£50 for being recommended and £25 as a new customer). Blimey! But do we need to be offered money to move? A recent Moneyfacts survey found that nearly two thirds of us are not happy with our banks and poor interest rates are likely to be a major factor. Many of the big High Street banks (such as Barclays, HSBC and NatWest) pay a measly 0.1% interest a year on their current accounts. As each of the banks mentioned earlier is paying at least twenty times more interest than this, it's surprising that so many of us haven't switched. However, in a somewhat surprising move, Barclays has now decided to join in the war for customers. Instead of offering more interest, Barclays has chosen to offer a series of benefits and services with its Additions Plus (packaged) account, provided you pay in at least £1,000 each month. Key Benefits with the Additions Plus account However, in order to take advantage of these benefits, you must pay a monthly fee of £12, which Barclays promise will be automatically refunded after the first 10 months. It's also worth noting that this offer is only available to new customers. And although the interest payable is still just 0.1%, Barclays has argued that this list of benefits could be worth far more (possibly up to £1,000). Alliance & Leicester, however, does not agree. It argues that its customers already currently receive free travel insurance, an interest free overdraft for 12 months and fifty times more interest than Barclays' customers and they're not charged a monthly fee! It's certainly true that many of the features of the Barclays Additions Plus account can be obtained for free, elsewhere. Even if you were to buy the travel insurance and breakdown cover yourself, it would cost nowhere near the values given if you're prepared to shop around for the best deals. And packaged accounts are generally not a great deal for the customer; independent consumer magazine Which? believes that they are really a disguise for bringing back banking fees! However, Barclays' point about interest on current accounts is a valid one for some people. Many people choose to keep as little in their current account as possible, promptly filtering out any excess funds into a savings account. Not only can this technique help you to earn as much interest as possible, but by not being able to access the money easily it can curb your spending, too! The account you choose has got to depend on your personal situation. If you currently have a huge overdraft or credit card balance that you're paying interest on (and you'd find the extras useful) the Barclays account could be worth switching to. You could always switch again when ten months are up and your monthly fees have been refunded! However, if you only occasionally slip into overdraft and prefer to earn interest on your money, Alliance & Leicester looks to be a better deal, and it's currently topping the best buy tables at Moneyfacts, to boot! But don't forget about the benefits associated with the other current accounts available. If you're keen that your money is only invested in an ethical way, Smile's account would be worth considering. Smile and First Direct are always receiving awards for excellent customer service, too. And if you travel regularly, Nationwide's FlexAccount will allow you to withdraw cash abroad, for free! So don't hang about if you've not switched yet, find a better current account, today! You can apply for the Alliance & Leicester, First Direct, Smile, and Nationwide accounts in our Banking Centre.