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21 May 2022

Thinking of switching current account? Here’s what to consider first

Thinking of switching current account? Here’s what to consider first

Switching current account can be a very rewarding move for people looking to make their money work harder, and find a deal better suited to their everyday needs.

Some 196,964 switches took place between January and March 2022, according to the Current Account Switch Service (Cass) – a 41% increase compared with the same period in 2021.

Some banks are offering as much as £170 to tempt switchers – but it also pays to make sure the account will suit your needs. You may also want to research whether a bank performs well for customer service.

“Choosing the right current account depends on someone’s spending habits, as there are a variety of different accounts out there with their own benefits and charges,” says Rachel Springall, a finance expert at Moneyfacts.co.uk.

“Consumers who are searching for a rewarding bank account may wish to choose one that offers cashback on spending, or even on their monthly bills – there are even accounts that pay a monthly reward when certain eligibility criteria is met.

“On the other hand, those consumers who may dip into their overdraft would be better off choosing an account with a competitive overdraft tariff, or even an account with an interest-free buffer.

“Those who plan to make frequent trips abroad can also find accounts that don’t charge them for using their debit card in an ATM or in store, so they can avoid paying out on transaction fees compared to a more traditional bank account,” adds Springall.

Some accounts charge a monthly fee in return for a package of benefits. It’s important to weigh up how useful these will be compared with the fee.

Among the different packaged options, Springall says Nationwide FlexPlus offers mobile, travel and vehicle breakdown cover for a £13 monthly fee. The Halifax Ultimate Reward Current Account offers mobile, travel and vehicle breakdown cover and cashback among its rewards and benefits for a £17 monthly fee.

Virgin Money’s Club M account has a a £14.50 monthly fee for maintaining insurance benefits. Santander’s 123 Current Account, meanwhile, includes cashback on selected bills and other benefits for £4 per month.

It’s also worth bearing in mind when switching that Cass can take the hassle out of moving bank or building society accounts. Switches are completed in seven working days under the initiative, payments are automatically moved over to the new account, and a guarantee means customers are not left out of pocket if something goes wrong with the switch.

Springall adds: “Switching current accounts is easy to do using the Current Account Switch Service, and some banks will pay an upfront free cash incentive to entice customers.

“However, it’s the overall package of an account that should be weighed up, before someone commits to switching their current account.”

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