The most recent IT malfunctions affected customers of Lloyds Banking Group last month, leaving them unable to make payments or use cash machines for three hours. Before that, in June last year, customers of NatWest, RBS and Ulster Bank were unable to access their money for up to six days because of technical problems.
But if you’re losing faith in your bank, there’s nothing stopping you from switching to a new one. It’s now easier to do than ever, but that’s just one good reason to switch. Here’s more on that and a few more.
1. Switching is easier than ever
It used to take weeks to switch your current account to a new bank, and the process was prone to administrative problems, leading to missed payments and other complications – but that’s all changed now. Apply for a new account today via our current accounts channel and you’ll be with your new bank in seven working days.
Not only that, but the Payments Council’s Current Account Switch Guarantee will ensure all direct debits and standing orders are carried over automatically, while redirecting any payments made to or requested from your old account for 13 months.
2. You could earn higher interest than with a savings account
Thanks to the Government’s Funding for Lending scheme, savings rates are in the doldrums. As a result, some current account rates now massively outperform savings rates – which means you’re better off stashing your cash there.
For example, the Nationwide FlexDirect current account pays 5.00% AER on balances of up to £2,500 for the first 12 months of opening the account, the Clydesdale Bank Current Account Direct pays 4.00% AER on balances up to £3,000 (until March 2015 when it reverts back to a variable 2.00% AER), and Santander 123 Current Account pays 3.00% AER on balances of between £3,000 and £20,000 – with no time cap.
3. You can get paid to switch
What better incentive is there to switch than being paid for it? Switch to First Direct and you’ll get £100. What’s more, if you’re not happy with the internet-only bank and decide to leave after six months, First Direct will send you off with an additional £100.
Halifax will also pay you £100 when you switch to one of its current accounts (current account, Reward Current or Ultimate reward account) using its dedicated Current Account Switch Service. If you’re feeling charitable (and still fancy a little something for yourself), the Co-operative Bank is currently offering £100 for you and £25 to one of seven charities (you choose) when you open a standard Current Account, Current Account Plus or smile Current Account. You can read more about this in my Focus on.
Nationwide has also just unveiled a new Refer a Friend incentive scheme that pays cash to any existing customer who recommends the bank to someone who then signs up. Both the existing customer and the new joiner will get £50.
Each cash incentive has its own terms and conditions, which you can read more about on our current accounts channel.
4. You’re paying (unnecessarily) for your overdraft
You can get a free overdraft for up to 12 months, so if you’re currently paying for your overdraft, switching could help you get gradually back into the black. And even if you’re in the red with your existing bank, you’re still likely to be able to switch to a new bank and take the debt with you.
As I explained recently in my article, Best banks if you're overdrawn, the Nationwide FlexDirect current account offers a 0% overdraft for 12 months, as long as you pay in £1,000 a month. The first direct 1st Account comes with a formal overdraft of £500 as standard – the first £250 of which is interest-free.
5. You can get paid to spend
Some current accounts reward you with cashback for the spending you’d be making anyway, so you could be earning money for nothing.
The Santander 123 Current Account, for example, pays cashback on your household bills. You get 1% cashback on water, council tax payments and Santander mortgage payments (up to £1,000), 2% on gas and electricity bills and 3% on mobile, home phone, broadband and pay-TV bills.
NatWest and RBS’ range of current accounts also offer the chance to earn a minimum 1% cashback when you shop with selected retailers.
6. Your bank’s customer service is a constant annoyance
For some of us, poor customer service is reason enough to vote with our feet and take our business elsewhere. If you’re dissatisfied with your bank, check out the customer service ratings of all current account providers on our site provided by MoneySavingExpert.com users. We’ve compiled the best here.
Also, keep your eyes peeled to see who gets the coveted MoneySuperMarket Supers award for best current account provider later this month, once the winner has been announced.
7. You want better mobile banking
Not so long ago, I asked users of the big banks’ mobile banking apps to tell me how useful each one was. The results, which you can read here, indicated that Barclays, Lloyds TSB and Halifax offered the most comprehensive apps.
If managing your money on the go is important to you, but your current bank’s app isn’t giving you what you need, switching may be the answer.
8. You don’t want to pay for your account
The end of free banking has been heralded for some time, but if you are happy to go without the extras such as mobile phone insurance and breakdown cover, there are still plenty of free current accounts out there. Have a search on our comparison table.