The number of people moving current account has shot up since the launch of the seven-day switch service.
More than 600,000 people have switched their current account since the Current Account Switch Service – designed to make moving account quick and painless – was launched.
The Payments Council, the body in charge of implementing the scheme, has published figures which detail the number of people using the service between 1st October 2013 and 31st March 2014.
A total of 609,300 switches were completed over that period, which is a 14% increase on the same period the year before when there were 532,500 recorded moves.
The Payments Council believes both better awareness and confidence in the service have helped boost switching levels. It’s been tracking public sentiment through monthly online surveys across the UK since before the launch.
The findings show that, by the end of March 2014, over two-thirds (67%) of the general public were aware of the new service (up from 59% in December) and 65% were confident that the new service works (up from 58% in December).
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The switching revolution
The Current Account Switch Service was launched back in September 2013
It’s been designed to speed up and take the hassle out of changing current accounts as well as to encourage competition between providers.
A total of 33 banks and building societies signed up to the service and agreed to the customer guarantee. This requires them to take care of moving all incoming and outgoing payments, as well as providing a redirect service for 13 months to ensure no money is lost in the transition. Around £1.75 million-worth of payments have been redirected so far.
The guarantee also represents a promise to perform the move in seven working days. Previously it could take up to 30. If anything goes wrong with the switch customers will be refunded any interest or charges incurred.
According to the Payments Council over 99% of switches completed within the seven-day timescale.
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Current accounts worth switching to
If you’re thinking about joining the 600,000 that have already made a move to a new current account, there are plenty of accounts out there worth switching to right now.
Many are now paying decent levels of credit interest.
TSB’s Classic Plus Account pays a joint market leading 5% credit interest on balances up to £2,000. That’s better than any traditional savings account and, unlike other accounts, the rate won’t fall away after 12 months. Plus you only need to put £500 into the account each month to qualify for that interest rate, which is one of the lowest funding requirements out of the leading deals. You’ll also get a three-month fee-free overdraft if you switch.
Nationwide’s FlexDirect account also pays a market leading 5% but on balances up to £2,500 and only for 12 months. You’ll need to fund the account with £1,000 a month in order to qualify for interest. The FlexDirect account also comes with a 12-month fee-free overdraft and exclusive offers on other products like credit cards and savings accounts.
[SPOTLIGHT]If you’ve got a bit more stashed away you could go for the Clydesdale or Yorkshire Bank’s Current Account Direct, which offers 3.83% on balances up to £3,000. However, this rate drops to 2% after 31st March 2015. You also need to fund the account with £1,000 a month in order to qualify for interest.
Meanwhile the Lloyds Bank Club Current Account pays tiered interest, with a maximum 4% on balances of £4,000 to £5,000. You also get a £100 fee-free overdraft, exclusive access to other products like mortgages and the choice of free Gourmet Society membership, six free Vue cinema passes or an annual magazine subscription each year. You need to have two direct debits set up to qualify for the interest and credit the account with £1,500 a month to avoid a £5 monthly fee.
For a decent long term rate on larger balances the Santander 123 Current Account is the one to go for. It pays 3% on balances between £3,000 and £20,000. It also pays up to 3% cashback on your household bills and comes with a four month fee-free overdraft if you use the switching service. You’ll only need to fund the account with £500 a month and set up two direct debits to take advantage of the benefits. The account has a £2 monthly fee.
Switching bonuses
Alternatively there are also some decent current accounts that come with switching incentives.
First Direct – famed for its great customer service – will pay you £100 for switching to its 1st Account, and a further £100 if you decide to leave between six months and a year after you join. You won’t get any credit interest with this account but you do get a fee-free £250 overdraft.
Halifax is offering £100 cashback if you switch to either its basic no-frills Current Account, Reward Current Account (which pays £5 cashback each month if you pay in at least £750, have two direct debits and stay in credit) or Ultimate Reward Current Account (which offers a range of extras like worldwide family multi-trip travel insurance for £10-£15 a month).
The Co-operative Bank is also offering a £100 cash bonus, as well as £25 to a charity of your choice, if you open one of its current accounts. You can go for the no-frills Standard account, the Current Account Plus (which offers a £200 fee-free overdraft as well as preferential deals on savings and loans) or the smile current account (which comes with a £500 interest-free overdraft as well as preferential deals on savings and loans).
The Post Office is offering a £100 One4All gift card that can be spent at a variety of retailers. The offer applies to its no-frills Standard account, Packaged account (which comes with extras like travel insurance for £8 a month) or the Control account (which helps you limit bank charges and costs £5 a month).
And Marks & Spencer is offering £150 in M&S gift cards if you take up one of its packaged accounts. The Premium Current Account costs £10 a month and includes loads of freebies and discounts, exclusive access to products and a £500 overdraft. Alternatively there is the Premium Current Account with Insurance which, on top of everything offered by the Premium Current Account, comes with worldwide multi-trip travel insurance for £17.50 a month.
Meanwhile, Nationwide is doing something a little different. It’s offering existing Nationwide current account customers a referral bonus of £50 each time they get someone to switch to either its no frills FlexAccount, FlexDirect (which as mentioned before pays 5% credit interest for 12 months and offers a 12-month fee-free overdraft) or FlexPlus account (which for £10 a month offers a host of benefits like travel insurance as well as 3% credit interest and a three-month fee-free overdraft).
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