Banking is a competitive business. Currently, many account holders can find incentives of up to £220, but many choose to holdfast. With that idea in mind, is it wise to switch bank accounts? The answer may be yes.
Assessing Your Account
Before you can decide if a switch is the right move, you need to know the details of your current account. For example, do you pay any fees to operate your account? Are you receiving interest on your deposited funds? If you are receiving interest, at what rate? Do you receive additional benefits for maintaining that particular account?
Once you collect this information, you will be prepared to make knowledgeable comparisons.
Look at New Options
With pertinent details about your current account in hand, you can examine offers from other banks. Do a direct comparison by looking at each line item. You want to assess the fees, interest rates, and benefits associated with the other account. If you occasionally overdraft, check the new accounts overdraft fees as well.
Don’t stop by only looking at one alternate option. Instead, check a few banks that provide the services you need. For example, if you need a local branch, see which banks operate in your local area. If you use a mobile banking app, make sure any banks in consideration offer one as well. You also want to make sure their app has the features your need.
Besides incentives to switch, you may find yourself the recipient of additional savings. In late 2015, the Competition and Markets Authority (CMA) found that many account holders could save £70 a year by switching. For customers that tended to overdraft their accounts, the savings could equal as much as £260 a year. With numbers like that, the idea of switching is hard to ignore.
So, why don’t more people switch? It may be the misconception that switching is challenging. In fact, it can be simple to make a change.
Making the Switch
The process of transitioning to a new bank has become significantly easier thanks to the current account switch guarantee. The process allows you to initiate the creation of a new account, and select a start date for it to take effect. On that date, your new bank takes over. Your balance, direct debits, and standing orders move seamless to the new account. The entire process takes only seven working days or less.
Should you forget to update an account, payments required against your old account are automatically forwarded for 36 months. This eliminates the risk of a failed payment simply because you forgot to update your information.
Why Not Take a Look?
Even if you don’t switch in the end, it doesn’t cost anything but time to look. With a little effort, you may find a better deal. Not only can this save you money now, it continues to save you money the longer you stay with it.
And, after a while, you can look at switching again. Your personal circumstances will change over time, and so will your banking needs. Additionally, banking technology will likely evolve over time as well. The best deal may change regularly, so consider exploring your options on a regular basis to keep the savings coming.