COMMENT
Four Reasons To Switch Bank!

By Alison Hunt (TMFAlly)
November 10, 2005

Have you ever thought about how much money passes through your current account? Twelve salary payments a year, plus any other income (maybe the odd eBay payment for example) adds up to a serious amount of cash. Although most of it probably doesn't stay there for very long, your bank is still very grateful for the time it is there.

The trouble is, you don't get much in the way of interest in return. Pitiful rates of just 0.1% are the norm on the High Street, and woe betide anyone who falls foul of their overdraft limits as excessive charges are likely to hit you where it hurts.

Of course, we don't have to stand for this! We can exercise the right we all have and vote with our feet. What's more, contrary to the beliefs of many, switching bank account is not difficult. All you really need to do is open your new account and tell your new bank the details of your old one. Your new bank will then carry out the donkeywork and get those direct debits and salary mandates moved over - all you'll need to do is sign a few forms to agree. And as long as you make sure that you leave some cash in both accounts until the switch has fully completed, you should find the process easy and straightforward.

So if you need a bit of encouragement to switch, here's what you could be missing out on:

1. Claim free cash

Well, this is one that interests most people. A number of banks actually offer cash incentives to those who switch to them. For example, move your banking to First Direct or Lloyds TSB and once your salary has been paid in you'll be rewarded with £50 cash.

Switch to Citibank and you'll similarly find yourself £75 better off. And if you know someone with an Alliance & Leicester current account, get him or her to recommend you and you'll both earn £50! And although Smile doesn't offer cash, you will receive twelve bottles of wine when you open a current account - but you'll have to be quick, this offer ends on 12 November.

2. Earn more interest

How much interest is your cash currently earning? If you bank with one of the big, High Street names, you probably won't want to answer, as it's so pitiful!

Luckily all banks aren't so mean. Switch to Alliance & Leicester's Premier Direct current account and as long as your balance is below £2,500 you'll find that your cash will earn a whopping 5%AER until the end of the year - that's more than most savings accounts! Move your banking to Cahoot or Lloyds TSB and your cash will earn a fantastic 4%AER, and if you pick Smile or Nationwide BS you'll earn 3.3%AER and 3% respectively.

3. Cheaper, or even free borrowing

If you're in the habit of slipping into the red every now and again, you'll know all about overdraft rates and charges - you'll probably have been stung more than once! However, pick the right current account and you could reduce these costs considerably.

For example, Citibank currently offers an interest-free overdraft buffer of £500 to all new applicants (subject to status). However, new customers earning £30,000 pa or more will be offered an interest-free overdraft buffer of £1,000.

And Alliance & Leicester offers a useful 0% overdraft facility for 12 months if you switch to its Premier or Premier Direct accounts. However, in addition to this, and in a bid to make it easier to move current account, it has now introduced a Premier switching service. As part of this service it promises:

(i) Anyone switching will not be charged any overdraft fees or charges, even if they should go over their overdraft limit.

(ii) Every successful applicant (who requests an overdraft facility) will be given a limit of £250.

(iii) If you already have an overdraft with your existing bank, Alliance & Leicester will match it.

This service should certainly help to bring peace of mind to anyone contemplating a switch that was concerned that something may go wrong, leaving him or her with unpaid direct debits or overdraft charges.

4. Extras

And finally, did you realise there are many extras available with a number of bank accounts? Alliance & Leicester Premier current account customers (aged 65 or under) receive free, annual worldwide travel insurance. You can also earn up to 10%AER on your savings with its linked Premier Regular Saver account.

Open a Halifax Moneyback current account and, as long as you pay in at least £1,000 each month, you'll earn cashback every time you use your debit card. The first £10,000 spent per year will earn 1% cashback, with subsequent spending earning 0.1%, so that's a potential £100 to be earned if you spend £10,000.

And if you travel frequently, the Nationwide BS current account allows you to make cash withdrawals with your debit card, worldwide, for free.

So there you have it, four of the best reasons why you should consider moving bank account. What are you waiting for?

You can apply for the A&L, Nationwide BS, Cahoot, Smile, First Direct and Citibank accounts in our Banking Centre.