Most of us are afraid to change our current account because of imaginary hassles. In reality, the process is amazingly simple!
According to a new survey from a high-street bank, the number-one reason why customers do not switch current account is the hassle of moving Direct Debits and standing orders. A survey of 3,740 adults for Abbey by polling company YouGov found that people came up with six main excuses for sticking with their existing current account:
- Almost two-thirds (65%) think transferring Direct Debits and standing orders would be too much hassle.
- Close to half (49%) believe that switching would be pointless because all banks are the same.
- Nearly three in ten (29%) fear that they would lose their personal banking contacts.
- Around a quarter (26%) assumes that banks would not help them to transfer, and a similar proportion (24%) believes that a new provider would not offer better facilities.
- One in six (16%) believes that they are unable to switch because of their overdraft.
- One in twelve (8%) claims to be locked in by monthly benefits from packaged accounts.
Frankly, most of these reasons for not switching banks are nothing more than excuses or imaginary fears. Although it's true that account switching was more complicated and riddled with pitfalls in the past, an improved Banking Code now makes it easier than ever to jump ship!
For the record, you can hand over the hassle of transferring Direct Debits and standing orders to the switching team at your new bank, which will automatically arrange these transfers within ten working days. Furthermore, having an overdraft will not prevent you from moving to a better current account. Indeed, if you choose the right account, you can enjoy an interest-free overdraft for an entire year!
Once again, it's clear that perception, rather than reality, is preventing people from moving between banks. Also, it's said that inertia rules in banking, because we're more likely to move house or change partner than to switch current account. Nevertheless, almost nine in ten people who had moved their current account (a whopping 90%) stated that switching was very easy or fairly easy to do.
In summary, don't let your imaginary fears put you off from voting with your feet by moving to a Best Buy bank account. Why earn a pathetic 0.1% a year in interest on your credit balances, or pay between 15% and 35% a year when you're in the red, when you can enjoy the benefits on offer from these Best Buys? For what it's worth, I'm in the process of switching to one of these beauties, and it's been a doddle so far!
Best Buys for credit balances
Account | Credit
interest
rate
(% AER) | Notes |
|---|
Alliance & Leicester
Premier Direct | 6.10 | You must pay in £500 a month.
0.10% paid on excess balance over £2,500. |
Coventry BS First | 5.35
(on up to
£250k) | You must pay in £1,000 a month.
Includes a bonus of 0.85% for one year. |
Halifax High Interest
Current Account | 5.12 | You must pay in £1,000 a month.
0.1% paid on excess balance over £2,500. |
Best Buys for overdrafts
Account | Interest rate
for authorised
overdrafts
(% EAR) | Interest rate
for unauthorised
overdrafts
(% EAR) |
|---|
Alliance & Leicester Premier Direct | 0% for 12 months on
up to £2,500, then 5.9% | 5.9 |
Nationwide BS FlexAccount | 7.75 | 24.9 |
Halifax Moneyback | On transferred accounts,
fee- and interest-free
overdraft of up to £2,500
for 120 days, then 7.9% | 28.8 |
More:Compare current accounts at the Fool!
