There's a definite surge of interest in bank accounts at the moment. Not only have several new providers got into the current account arena over the last few months, but the raft of new account launches and extra hype surrounding the Switch Guarantee service means providers are trying harder than ever to compete for your business. So, could you be better off by switching?
If you do your research, there's every chance that this could be the case. Unfortunately it's something that far too few people even consider, with several studies pointing to a distinct feeling of apathy among banking consumers, few of whom take the time to see what else is out there.
According to research from TSB, this is a particularly big problem among women. Although 91% of women surveyed consider looking after their finances to be a key priority, they only change bank account once in their adult life – and often they don't switch at all.
In some cases this could be due to misplaced feelings of loyalty, or perhaps because it seems like too much hassle to switch. Some might be concerned that they'll get a worse deal if they went elsewhere, but there's no harm in looking. If you've been with the same bank for years and aren't overly happy with the service it could well be time to test the water, because with so many new accounts on the market, there's never been a better time to switch
Andy Piggott, head of current accounts at TSB, said: "Money is an integral part of our lives and it is important people trust their bank, have confidence that it will look after their money and know that the bank suits their individual financial needs. Banking is about the whole experience and it is therefore important that people take time to choose which bank they switch to."
So, with that in mind, we've compiled a quick overview to help you see if you could be better off by switching.
Top tips to find an account that works for you
What about high interest bank accounts?
High interest bank accounts will often pay interest that far outweighs anything that can be earned with a traditional savings account, and it's this reason that they're growing in popularity. A lot of people are looking to these as a viable alternative to a savings account, and when you can achieve up to 5% interest from TSB's Classic Plus account and Nationwide's FlexDirect, they could be a great option.
Of course, there are some drawbacks. You don't get anything for free, as they say, and most of these high interest current accounts will come with various restrictions and limitations so as not to become solely used as savings accounts.
For example, most will only offer the headline interest rate on balances up to a certain amount, with anything over that maximum level not generating any interest. Most have minimum monthly funding requirements too – you'll need to deposit £500 or £1,000 a month, for example, to secure the rate – and some have additional rules too, such as requiring you to hold at least two direct debit mandates with them.
If you're happy with the rules and regulations, however, high interest current accounts can be ideal, particularly if you rarely go into your overdraft (always try not to, as the trade-off of paying high interest is that they often charge high overdraft fees, too). They could even be a great home for a portion of your savings, so why not see which ones could be right for you?
Compare bank accounts to find one that meets your needs.
Consider high interest current accounts – check out the best buys.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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