The Payments Council has just released results of the first six months of the new current account switch service, showing the number of people that have switched accounts since its launch. Well, the figures show that 609,300 switches took place between 1st October and 31st March - a 14% increase compared to the same period last year.
More people are also becoming aware of the service, which should make switching current accounts from one bank or building society to another, simpler, reliable and hassle-free. More than two-thirds (67%) of people are now aware of the service and customer confidence in the service is high at 65%.
Banking customers should now be able to switch provider within seven days and the new bank or building society should take care of all your direct debits and payments, transferring them over on a date agreed by you without you having to do anything. Previously this took anything up to 30 days and could prove a tiresome task, but with this new service if there are any mistakes resulting in charges or loss of interest this will be refunded to you by your new provider - so it's no wonder more people are choosing to switch.
Gary Hocking, managing director of the Payments Council, said: "By making the Current Account Switch Service quick, hassle-free and removing the fear factor we've taken away the barriers customers told us they had when it came to switching. Six months in and the latest figures suggest people clearly seem to be getting the message that things have changed for the better.
"There's also been a noticeable surge of advertising activity from current account providers big and small, suggesting that the new service is helping foster competition and choice for customers. As time goes on and the track record of the new service builds, we look forward to these encouraging results continuing."
However, critics are saying that these levels are still relatively low compared to what might have been expected, with the Current Account Switch Service not being the "game changer" it could have been.
But, what it has done is helped to boost competition in the current account market. Arguably it's made banks realise they need to up their game if they want to retain some form of loyalty from their customers – or to attract more – which is perhaps why so many deals, offers and attractive account packages have been launched in recent months.
Bank accounts offering cashback has been a particular trend, as have high interest current accounts, with some paying up to three times the rate of instant access savings accounts. However, consumers should bear in mind that these accounts are not such a good deal if they regularly dip into their overdraft as they often charge high rates and there may be many terms and conditions, including minimum funding requirements and the setting up of direct debits.
Keep your eye closely focused on the bank account market this summer as many new ranges are cropping up, and if you keep your account in the black, have a regular income and a bit of capital to invest then you may want to consider a current account as a profitable alternative, or complementary product, to a savings account.
As Rachel Springall, of Moneyfacts, said: "People don't have to stay loyal to their bank as loyalty doesn't always pay off, so if you can get a better deal elsewhere, just remember that it's easier to move than ever before."
Save up to 5% with a high-interest current account
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