Whether you are someone who runs your current account in credit or makes regular use of an overdraft limit, there are financial benefits to be had when switching your current account.
Whilst switching a mortgage, credit card or savings account has become almost the norm as people have started to become more savvy about making the most of their money, there is a combination of reluctance and apathy when it comes to moving your current account.
Current accounts are big business
Being the provider of your main current account is big business. Once an institution has your current account, they know much more about your financial position and see the account as a gateway to sell you other potentially lucrative pension, investment and insurance products.
Over the last year we have seen institutions offer incentives to get you to switch current account. Halifax was offering £100 for anyone switching to its funded account, Alliance and Leicester offers £25 to you and a friend if you recommend it and First Direct currently offers £100 if you choose its current account and £100 if you leave between six months and a year after setting the account up. The main catch with these is that these accounts are often funded, so you need to be paying between £1,000 in to the Halifax each month or £1,500 into First Direct.
By switching you could be £180 better off
Exclusive research from moneyfacts.co.uk has revealed that if you have a healthy balance in your current account you could make over £180 in interest by switching current accounts. If you have a typical current account from one of the largest five banks, you will earn a measly £1 a year on a balance of £1000. If you can fund a high credit interest paying current account and maintain an average balance of £1000, you could earn up to 8.0% (AER).
See how much extra interest you could earn today:
Compare Current Accounts
Switching can also save you £130 in overdraft charges
At the other end of the scale, even if you rely on an overdraft you could still save over £130 in charges. Even though your overdraft is authorised, you may still be paying a higher than necessary interest rate on that debt.
So if you know that you will be using an overdraft facility, why not search out the cheapest option and see how much you could save today:
Switching current account has never been easier
Over the last few years, banks have competing for current account business. More recently, in their search for new business and to combat recent bad press, they have introduced current account switching teams, dedicated to making the transition between current accounts as smooth as possible. In order to offer people piece of mind, some institutions will even offer compensation if the current account is not switched within the given time and also give you an overdraft limit to cover any problems that may come about.
Before you switch, read the small print
If you are thinking of switching to a high interest current account, it is important to understand the terms and conditions. Some will restrict the highest interest rates to one year, reverting back to a lower rate and there will also be restrictions on how much the high interest rate will be paid out on. A lot of these better current accounts will also require a minimum monthly funding which is usually around £1000.
Switching has never been easier, so why not see how much you could save today:
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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