Can you cash in on your current account?
In the current challenging economic climate, everyone is looking for ways to make their money go a little further. The fact is, consumers are feeling the squeeze, with creeping inflation, high unemployment and stagnant wages. Many are looking for discounts and the competitive service offers on http://www.moneysupermarket.com/current-accounts/.
Businesses are also feeling pressure, as their sales drop and this is even the case with banks. Increased competition from foreign owned banks, rising customer defaults and a drop in profitable financing activity means that banks are looking for ways to attract more customers onto their books.
Banks also know that most customers are relatively lethargic when it comes to switching their accounts. Once they are hooked into a bank account or other financial product, they will likely stay with it for many years, unless something significant entices them to change provider.
This means that competition is hotting up for current account customers. Witness for example, the recent £200 new customer offer from the Co-op bank, available to customers opening up one of their range of current accounts and switching from another banking provider.
The offer was so popular that it was withdrawn after five days! Cash-strapped customers applied in droves, engulfing the Co-op’s application processes and apparently over-subscribing the offer.
Whether the £200 incentive was as much a PR stunt as a genuine attempt at customer reward is up for debate, but the example is indicative of how fierce competition is becoming in the sector.
It’s good news for customers with good credit records and banking habits, as well as those who earn a steady income. There are currently some great offers around for those who take the time to look.
These vary, from incentive cash sums of up to £100, to other benefits for switching customers, such as preferable interest rates on linked products. For example, some banks offer higher savings rates to their existing customers, others offer preferable mortgage rates.
Some offer packaged accounts with benefits including mobile phone and travel insurance, discount vouchers, identity protection and other add-ons. However, these are likely to come with charged-for accounts, usually packaged as ‘premier’ accounts.
It’s worth looking around the market if you are thinking of switching your current bank account, particularly if you have been with your provider for a long time and feel there is no particular customer service or other benefit.
Just remember to ascertain whether or not there is a genuine benefit to switching over before you do so – a gimmick or service that you are unlikely to use isn’t sufficient reason for switching and may leave you worse off.
Similarly, check that you won’t find yourself penalised for switching bank accounts if you are still tied into existing products with your current bank account provider. Many of these are tied and you may find yourself forgoeing any promotional rates or interest accumulation.
If you do switch for a promotional offer and you’re happy that the underlying service and package offer is comparable or better than your current one, ensure you read the small print carefully, so there are no nasty surprises later down the line!
You may find that you are obliged to use the new bank’s switching service and pay in a certain amount of money each month, as well as transfer over a certain number of direct debits. The benefit of the switching service to a customer however, is that they needn’t do any of the hard work associated with the administrative side of switching.
Check the entire breadth of the market using a price comparison such as Moneysupermarket. This site is updated regularly with all the new offers and latest deals, which can be viewed and compared alongside each other.
