Most people stick with the same banking provider for years on end. After all, they reason, it’s not worth the hassle of switching – and why fix something that isn’t broken? But what they don’t realise is that by staying with the same provider, they’re doing themselves a disservice.
That’s because not all bank accounts are made equal, with some offering better terms than others. On top of that, each banking company has a different approach to customer success and customer service, and many even offer rewards to new customers to entice them away from their current provider. Those rewards alone can make it worthwhile to switch companies every couple of years.
Another of the major benefits of switching banking providers is that it gives you the opportunity to audit your income and expenditure. For example, perhaps you’re paying unnecessary direct debits or you can save money by paying your water bill in advance instead of by paying monthly instalments.
The problem is that even if you decide it’s time for a change, it can be hard to know where to get started. That’s why we’ve done the hard work for you. Here’s what you need to look for and think about when it’s time to change bank accounts.
Questions to Ask Yourself
Before your search begins, you need to make sure that you’re asking the right questions and looking for the right information. After all, there’s no point spending time researching current accounts if it turns out that what you actually need is a savings account or a specialist joint account. The type of account that you’re going to need will depend largely upon your answers to a specific set of questions such as:
Do you need access to online banking?
Do you need any specific deliverables (i.e. chequebook, debit card, credit card)?
How easy it to find branches and compatible cashpoints?
Is it to store savings or to use on a daily basis?
Is the account for personal or business use?
What size of overdraft do you need?
What’s your credit rating like and will it damage your chances of receiving overdrafts etc?
Will you require text alerts or other services?
With your answers to these questions in mind, you’ll find it much easier to tell whether a potential bank account is right for you or not. And while it might not be possible to find an account that fits every single piece of your criteria, you can still try to find one that fits most of them. If you’re still struggling, it can help to rank each piece of criteria in order of how important it is to you.
Bear in mind as well that some bank accounts have extra features available in exchange for a monthly fee. These “packaged accounts” can be pretty good value if you need the bundled services such as insurance cover or other special offers. They can also be a waste of money if you don’t take advantage of those extra features, so be sure to proceed with caution.
Other things to consider
Different types of bank accounts are basically different ways of packaging a service, so if you shop around enough then you’re likely to find all sorts of different account types that may or may not come in useful. For example, some companies offer “jam jar” accounts, which are specifically designed to help you to budget by allowing you to divide your money into different virtual “jars”.
Almost every banking facility will offer some form of student account, and many also have graduate accounts with interest-free overdrafts to help people to transition from student life to the real world. They do this because they want to lure people in and keep them as a customer for the rest of their lives through brand loyalty and inertia. Don’t be fooled – when you’re no longer a recent graduate, you can usually find a better deal elsewhere.
Another thing to consider is the fees that the bank has in place to charge people who exceed their overdraft or go overdrawn. Different banks charge different amounts and while it’s better to avoid these fees altogether, it’s always nice to know what you’re up against just in case. Sometimes banks even offer free gifts as an incentive to people to encourage them to sign up. These gifts can range from cash rewards to higher interest rates, dedicated customer service and even physical freebies such as pens and t-shirts.
By now, you should know everything you need to know about comparing different bank accounts. The next step is to go out and put the work in. That means checking out websites, popping into branches and getting a feel for what different providers can offer you. Don’t be afraid to branch out and to pick a smaller, independent organisation instead of going for the big behemoths. Smaller, less established banking providers tend to have more to prove, and you can often see that in the way that they treat their customers.
In fact, you can often get a pretty good idea of how a bank is likely to treat you based on how they act towards you when you walk through the door and ask to speak to someone. You’re going to want to make sure that you pick a bank that goes out of its way to help you to get started. If they act unconcerned when it comes to taking you on as a customer, how are they going to act when you have a problem and you need their help?
Ultimately, the best bank account for you is the one which meets your needs the most, and those needs can change over time and force you to jump ship and to switch to another provider. When that happens, that’s okay. You don’t owe your bank a thing (unless you’ve borrowed money from them). You need to put yourself first and go with the bank that has the most to offer you. Good luck.