Switching current accounts? 8 questions to ask your new bank first
If you're fed up with your bank and looking to move, these eight checks will ensure you're happier with your next current account.
Thousands of people move their bank accounts every month – but what do you need to know before making the switch?
Here are eight questions you need to ask.
Does your new bank have branches and proper phone support?
Perhaps the most important thing to factor in is the kind of support you would like.
If it's important that you're able to walk into a branch to sort your banking or query something that's gone awry, then think carefully about which bank you choose.
In the past, you could simply go for one of the 'big four' banks and be confident that there'd be a branch somewhere nearby.
But the number of bank branches is plummeting: a report from the House of Lords highlighted how total branches fell from 14,689 in 1986 to just 5,745 over the course of 2023 alone.
As a result, there's every chance there might only be one bank to choose from in your area, so it's important you do your research.
Consider searching online to 'find bank branches near me' to see which brands still operate a physical presence near you.
Phone support no longer a given either
If you don't need to bank in-branch, it's still worth considering what type of support you'd like.
If speaking to someone on the phone is vital, you can no longer assume that's a given.
Some of the new app-only banks will force you to go through its plethora of guides and then 'chat' with an AI assistant before you even get the option to talk to an actual person.
Be sure to factor this into your choice.
Do you have to pay a fee?
Not all bank accounts provide their services free of charge.
A fee will usually be levied by accounts offering benefits such as mobile phone insurance and worldwide travel insurance.
This charge can often be between £3 and £15 per month but is it worth paying? That all depends on whether you’ll use the benefits and if you can buy them cheaper on their own.
Is there an incentive to move?
Free cash is offered by providers looking to attract new customers. These offers come and go quite frequently and the amount you can earn varies, but it's not uncommon to be able to pocket as much as £200 just for switching banks.
However, it’s important to do your research to ensure the account is suitable, according to Rachel Springall, spokesperson for Moneyfacts.
“Consumers hoping to switch their current account may wish to consider the latest offers, but they must not be swayed by a free cash boost alone and instead, ensure the new account suits their everyday banking needs,” she said.
Earn up to £175 when you switch bank accounts
Will your bank pay you interest on balances?
Some current accounts pay you interest on money in your account – so if you regularly have a decent balance then this will be attractive.
According to Sarah Coles at Hargreaves Lansdown, you’ll need to look around to see what deals are available.
“You can earn up to 5% at the moment on the first chunk of money in your account,’ she said.
“If you’re currently not making anything, it could be a rewarding move."
Best bank accounts that will pay you interest
How much are overdraft fees?
An overdraft can help you manage your finances by enabling you to borrow money when there isn’t enough in your account to cover transactions.
Sarah Coles at Hargreaves Lansdown said: “If you tend to dip into your overdraft, look for a bank with a fee-free overdraft buffer, so you don’t pay dearly for the odd slip.”
However, you need to check the overdraft rate. Currently, many providers have overdraft rates of almost 40% so if you’re not able to clear the debt you’ll be punished.
“Some banks will charge different customers different rates, so check what it will give you and how it compares,” she added.
The top bank accounts if you regularly go overdrawn
Does it have linked products?
Some current accounts will have special deals such as access to linked savings accounts offering great rates.
Much like switching bungs, it's a way of making their current account more appealing to new customers.
Is your money safe?
All banks and building societies authorised by the Prudential Regulation Authority (PRA) are covered by the Financial Services Compensation Scheme.
This means that up to £85,000 of your money will be protected should the financial service provider end up going bust.
But are you also protected from fraudsters?
It’s worth checking to see if the bank has signed up for the Contingent Reimbursement Model Code, which was started five years ago.
This sets out what they should do – and how to respond – to so-called authorised push payment scams (APP), which is when someone is tricked into sending money to a fraudster posing as a genuine payee.
Under the code, banks must put in place measures to detect and prevent such scams and reimburse customers who have fallen victim through no fault of their own.
Will it cost you to spend overseas?
Another factor to consider is whether the account offers fee-free spending and cash withdrawal when you’re overseas.
This is one of the cheapest possible ways to spend on holiday and takes the hassle out of sorting your holiday money.
Revealed: what your bank will charge you for spending abroad
Does it offer good customer service?
Don’t overlook a bank’s customer service track record. It can often be overlooked but you’ll appreciate in a crisis the benefits of being with an organisation that has a good reputation.
Have a look at the results of customer service awards. The chances are that the same handful of names will take the top sports.
Sites like Trustpilot are also useful sources of such information as their reviews recount the experiences of thousands of customers.
Thousands of people move their bank accounts every month – but what do you need to know before making the switch?
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