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Over a million switch current accounts in a year. Where's best to go?

Over a million switch current accounts in a year. Where's best to go?
Date of Publication: Thursday, 16 October 2014 13:44

Over 1.2 million people have moved their current account to another bank since a new quick-fire switch service was launched a year ago.

 

Figures released by the Payments Council suggest that the new seven-day Current Account Switch Service has boosted the number of switchers by over 20%.

 

1,203,334 people switched their current account during the year to the end of September, compared to 985,600 in the previous twelve months.

 

The Payments Council, which designed the service, said it had created “perfect conditions” to help banking customers find better value from their current accounts.

 

Stats indicate that Halifax, Santander and Nationwide have been popular destinations for switching customers, while Barclays and RBS have seen the biggest drop in customer numbers.

 

The impact of the £750 million switching system could grow further, with figures indicating that almost seven out of 10 consumers are now aware of the service and feel confident in using it.

 

Gerard Lemos, the chief executive of the Payments Council, said: “By making switching bank accounts easier for customers than ever before – with the added peace of mind delivered by the Current Account Switch Guarantee – we have created the perfect conditions for competition and choice to flourish amongst new and existing current account providers.”

 

What benefits does the switch system offer?

The obvious benefit of the new switch system is the speed at which switching accounts can take place.

 

From September last year, participating banks had just seven days to arrange a transfer – cutting previous account-switching times by as much as 75%.

 

Other benefits include an automated payment redirection service which handles any leftover payments involving the old account.

 

Both inbound and outbound payments sent to the old account are automatically forwarded to the new account for 13 months, eradicating most of the problems that arise from making a switch.

 

So if a switcher's employer fails to update his or her details in time, the payment still goes through and the customer has a year to resolve this before the old account details expire.

 

Finally, the switch service comes with a compensation guarantee if anything goes wrong, adding peace of mind to the process.

 

Mr Lemos said that customers thinking about switching should follow their instincts. “There has never been a better time to do it,” he said.

 

 

Where to switch to? Five top offers:

Another knock-on advantage of the new service is that it has encouraged current account providers to improve their offers.

 

Providers that offer no perks have started to struggle, while banks like Halifax and Santander are proving that rewards for current account customers are attractive in today’s market.

 

Halifax

Halifax has welcomed the largest number of switchers since the new system launched, and it’s not difficult to see why. Alongside a £100 joining bonus, the Reward Account pays £5 per month when users pay in £750, meaning users could be £160 up after the first year. The account offers a generous £50 overdraft buffer and cashback opportunities for debit card use.

 

Santander

The 123 current account offers up to 3% interest on credit balances and up to 3% cashback on household bills. Customers can also benefit from a year's free use of the 123 cashback credit card (normally £24) and 1% cashback on Santander mortgage payments. The account allows customers to generate excellent rewards on essential areas of spending.

 

See our review of the 123 current account here.

 

Nationwide

Nationwide’s FlexDirect account offers 5% interest on balances up to £2,500 for the first year when users pay in £1,000 a month (1% thereafter). It also offers a fee-free overdraft for 12 months and allows access to the society’s Flexclusive savings products. The packaged account, FlexPlus, offers 3% interest alongside a host of comprehensive insurance products for a knockdown £10 a month.

 

Find out more about the FlexDirect and FlexPlus accounts.

 

TSB

Following its split from Lloyds last year, TSB was quick to stamp its own authority with a new account offering a joint market-leading 5% interest. Customers will receive 5% on the first £2,000 of their current balance, provided that they pay in £500 a month. Unlike Nationwide, this is not propped up by a temporary bonus. Customers will also escape overdraft fees and interest if they go over by less than £10.

 

See our review of TSB’s Classic Plus here.

 

First Direct

First Direct, the online bank based in Leeds, matches Halifax’s £100 joining bonus. It has also received numerous awards for customer service. Both Which? and Nunwood have handed First Direct the top gong for service this year, and in a market where customers struggle to achieve good service, this must become a standout quality.

 

See our defence of First Direct against Move Your Money’s views here.

 

Current Account Switch Service

 

Keith McDonald

Which4U Editor

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Thursday, 16 October 2014 13:44
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Top 5 Current Accounts

Provider
AER
Min Bal
O/D Rate
O/D Buffer
Apply
View Full Table >
3.00%
£1
0%
£100
3.00%
£1
No Offer
£25
0%
£1
No Offer
No Offer
3%
£500
No Offer
N/A
No Offer
3%
£500
No Offer
N/A
No Offer

Nationwide FlexPlus Account

Nationwide
  • £10 per month gets you the following benefits:
  • Get 3.00% variable on balances up to £2,500 (no interest for balances £2.5k+)
  • 3 month Fee Free overdraft
  • Commission Free Cash Withdrawals Abroad
  • VISA debit card with every account
  • Travel Insurance - Worldwide travel insurance, including winter sports, golf, business and wedding cover for you and your family.
  • Mobile Phone Insurance - Worldwide cover if your phone's lost, stolen, or damaged.
  • Breakdown Cover - UK & European breakdown cover for you in any private car and also anyone driving your car with your permission.
  • Extended Warranty - Get an extra 12 months warranty for eligible household electrical goods.
  • Identity Theft - Get help and support if your personal data's compromised or your cards are lost or stolen.

TSB Classic Plus Account

TSB
  • Classic Plus –
  • Pay in min £500/month, register for Internet Banking, Paperless Statements and Paperless Correspondence
  • £25 interest and fee free overdraft subject to application and approval
  • Must be over 18 and a UK resident to apply
  • Contactless Purchases upto £30 for each transaction-
  • 5% Contactless Cashback –
  • With 5% Cashback on your first £100 Contactless payments every month (T&Cs apply. Subject to eligibility. End Sept 2017)
  • Register for Internet Banking. 18+, UK resident and Classic Plus account holder to qualify
  • Cashback will be paid on qualifying purchases until 31 December 2016
  • Must hold a classic plus account with TSB to qualify
  • · No introductory offer period or monthly fee
  • · Classic Plus account available to existing and new customers
  • · Access to all the features of the standard Classic account such as Money Planner, Control, SMS alerts and internet banking
  • · Transact in branch, online or over the telephone
  • · No hidden clauses – only need to meet CTO, register for internet banking, paperless statements and paperless correspondence to get the 3% interest rate

Nationwide FlexAccount

Nationwide
  • VISA debit card with every account
  • The age restriction to open the account is 18
  • Manage your account online with an excellent internet banking service.
  • Three-month interest-free overdraft when you switch to FlexAccount
  • Free day to day banking
  • Voted Best Overall Online Provider 2009 by Your Money

Santander 123 Current Account

  • The New 123 Current Account pays cashback on household direct debits
  • 1% Cashback on water and council tax
  • 2% Cashback on electricity and gas
  • 3% Cashback on mobile, home phone, broadband and paid for TV packages
  • New 123 Current Account pays also pays in-credit interest
  • 1% AER on the entire balance, once the customer’s balance is £1,000 or over
  • 2% AER on the entire balance, once the customer’s balance is £2,000 or over
  • 3% AER on the entire balance, once the customer’s balance is £3,000 or over (up to £20,000)
  • £5 per month.
  • Your overdraft fee will be 19.9% EAR plus an unauthorised fee of £1 per day.
  • Get a cheque book and a Visa Debit card. You can use your Visa Debit card in shops wherever you see the Visa symbol and at virtually every cash machine in the UK and many worldwide. It also acts as a £100 cheque guarantee card
  • Get 4 Months Fee-Free Arranged Overdraft when you use the Current Account Switch Service to move your current account to us and receive a Defaqto 5 star rated service.
  • Access to your money 24 hours a day 7 days a week through our e-banking service, 750+ branches, 24-hour telephone banking service, LINK cash machine network or even by post
  • You must setup a minimum of 2 active direct debits
  • You must deposit at least £500 per month
  • You are able to Withdraw upto £300 a day
  • This account is open to NEW and EXISTING Santander customers aged 18 and above (must be UK resident)

Santander 123 Current Account

  • The New 123 Current Account pays cashback on household direct debits
  • 1% Cashback on water and council tax
  • 2% Cashback on electricity and gas
  • 3% Cashback on mobile, home phone, broadband and paid for TV packages
  • New 123 Current Account pays also pays in-credit interest
  • 1% AER on the entire balance, once the customer’s balance is £1,000 or over
  • 2% AER on the entire balance, once the customer’s balance is £2,000 or over
  • 3% AER on the entire balance, once the customer’s balance is £3,000 or over (up to £20,000)
  • £5 per month.
  • Your overdraft fee will be 19.9% EAR plus an unauthorised fee of £1 per day.
  • Get a cheque book and a Visa Debit card. You can use your Visa Debit card in shops wherever you see the Visa symbol and at virtually every cash machine in the UK and many worldwide. It also acts as a £100 cheque guarantee card
  • Get 4 Months Fee-Free Arranged Overdraft when you use the Current Account Switch Service to move your current account to us and receive a Defaqto 5 star rated service.
  • Access to your money 24 hours a day 7 days a week through our e-banking service, 750+ branches, 24-hour telephone banking service, LINK cash machine network or even by post
  • You must setup a minimum of 2 active direct debits
  • You must deposit at least £500 per month
  • You are able to Withdraw upto £300 a day
  • This account is open to NEW and EXISTING Santander customers aged 18 and above (must be UK resident)

Santander Everyday Current Account

  • A simple and straightforward current account that helps make managing your money easy and convenient.
  • 0% EAR (variable) overdraft rate.
  • No Daily Arranged Overdraft Fees for the first 4 months when you switch to us (depending on circumstances. See representative example).
  • After 4 months the Daily Arranged Overdraft Fee will be 50p per day capped at 20 days each monthly statement period (if you don't switch these Daily Arranged Overdraft Fees will start from when your account is opened.)
  • Access to our dedicated Switcher Service - It is important that you feel confident about switching to us and what is involved. Click here for full details of our simple three-step process.
  • Easy access to your account 24 hours a day with our internet and phone banking service. Plus you have access to over 1,300 Santander branches.
  • Get 4 Months Fee-Free Arranged Overdraft when you use the Current Account Switch Service to move your current account to us and receive a Defaqto 5 star rated service.
  • Withdraw upto £300 a day.
  • No interest is paid on your balance.
  • You must be aged over 18 and live permanently in the UK.

Santander 123 Mini Current Account

  • The 1|2|3 Mini Current Account is designed to provide a safe environment to learn money management and take the first steps towards financial responsibility for those aged between 11 and 18.
  • With the 1|2|3 Mini Current Account you'll get:
  • Rewarding interest rates paying 3% AER/2.96% gross (variable) on balances from £300 up to a maximum of £2,000.
  • £100+ = 1% AER
  • £200+ = 2% AER
  • £300 - £2000 = 3% AER
  • 24/7 access to your account via Online, Mobile and Telephone Banking.
  • Access nationwide via our branch network.
  • Free text and email alerts about your account.
  • The choice of a cash card or a Visa debit card.

Santander 123 Mini Current Account

  • The 1|2|3 Mini Current Account is designed to provide a safe environment to learn money management and take the first steps towards financial responsibility for those aged between 11 and 18.
  • With the 1|2|3 Mini Current Account you'll get:
  • Rewarding interest rates paying 3% AER/2.96% gross (variable) on balances from £300 up to a maximum of £2,000.
  • £100+ = 1% AER
  • £200+ = 2% AER
  • £300 - £2000 = 3% AER
  • 24/7 access to your account via Online, Mobile and Telephone Banking.
  • Access nationwide via our branch network.
  • Free text and email alerts about your account.
  • The choice of a cash card or a Visa debit card.

TSB Classic Account

TSB
  • Free banking - no charge for everyday transactions when you’re in credit.
  • You will receive a debit card with your account
  • Manage your money 24 hours a day through Internet Banking, Telephone Banking and Mobile Banking.
  • Money Planner is a free, easy-to-use Internet Banking service that introduces a new way of keeping track of your money across your TSB personal current and credit card accounts.
  • £25 interest-free planned overdraft. (Subject to application and approval).
  • £10 overdraft buffer. No overdraft fees or interest to pay if you go overdrawn (either Planned or Unplanned) by £10 or less.
  • Grace period if you go over your limit. You have until 3.30pm (UK Time) to pay in enough money to avoid any overdraft fees you may incur that day.
  • Switching to us in just 7 working days – We can help to move Direct Debits and standing orders from any existing accounts to your TSB current account.
  • Access to over 600 branches and a network of ATM's worldwide