The Process and Benefits Of Switching Bank Accounts
It’s a free market, competition is positively encouraged between companies and the banking world is no exception. So what do you have to do when you want to change banks accounts?
Check it out
Most of us don’t bother to change our bank accounts; it’s a fact that we stick with the same account for a long time. This is partly why Banks can get away with submitting us all to horrendous charges and fees if we stray accidentally out of line. If we didn’t put up with it and showed our dissatisfaction by changing accounts then the Banking industry would change their policy: they would have to.
Mortgage
Look at the mortgage market and you can see how consumer demand has changed the way products are delivered and you can see the way in which the mortgage companies make their money has changed. Nobody is saying these financial institutions shouldn’t make money, they are a business and here in the West business is our chosen way of keeping the economy healthy, so it is important that Banks make money, it’s just how they do it we have an issue with.
Take action
The most important thing you can do as a customer is to be aware of how much and why you are being charged for operating your account. Look around you, examine other banks, do they charge the same amounts? Ask the questions, do a little research. Yes, it may take some time, but if you want to be banking with the best deal, you need to do some homework.
Rods for our backs
We spend a lot of time trying to buy the best bargains in shops or on the Internet; some of us spend hours looking at the same product in different shops to get a few quid off the price. So why don’t we do the same with our money?
More action!
Once you have identified a bank that will give you what you want, you need to open the new account before you close the old one. You will need to cancel all the old direct debits and other automated payments and set them up in the new account.
If you are using an Internet bank this is usually a simple matter of a few clicks. If you are stuck in a branch then things will require slightly more effort. Don’t forget to deal with all those automated deposits going into you account as well. Most companies pay their employee by direct transfer to the employee’s bank account, so make sure your works accounts department know your new bank details.
What is out there?
First Direct were recently motivating customers to change accounts by offering £50 cash-back to people who switched accounts. That’s a generous offer and First Direct is an award winning Bank which seems to offer the best of both worlds. They have accessibility through the internet and you can talk to real people on the phone about your account twenty four hours a day. Again that’s great service. They don’t of course have a branch that you can wander along to. Apart from the £50 cash incentive, their rates appear to be pretty run of the mill along with other personal accounts, so you would have to decide whether fifty nice crisp notes in your bank account was worth the switch.
Alliance and Leicester recently offered a similar incentive for customers to switch to their personal accounts but their deal was with the interest they attributed to accounts kept in the black. A high rate of 5.0% AER was offered for several months. But then at the end of that period it reverted to the more common 0.1%; So unless you got in there early the incentive rather paled by comparison to First Direct. They are a different type of bank, of course, and the fact they have branches might have swayed you.
Make your mind up time
At the end of the day, the choice is always going to be yours. Everybody wants something different from their bank accounts and will put different emphasis on how they like their banks to treat them.
There are numerous websites that will provide succinct comparison of accounts and these are probably the best place to start to quickly see if you are getting a good deal or not. Then what you do about it, if anything, is entirely up to you.
Other Recommended Sites:
- Bank and Savings Accounts – Information from the FSA
- Managing money – advice from the FSA website Choosing and Using
- Opening and running a bank account – impartial advice from the Direct Gov website
More related articles :
- How Do Bank Accounts Work?
We thought we’d look at how these bank accounts actually function from the Bank’s side of things and maybe along the way we’d find out whether the system is fair to its customers.
