7 top tips for helping you compare current accounts!
Choosing between current account providers is an important decision. After all, this is the main account you’ll be using for the vast majority of your day-to-day transactions.
The good news is that choosing an account and switching providers is easier now than it ever has been, and current account providers are falling over themselves with great offers to attract your custom.
The introduction of the ‘seven day switching’ scheme a few years back has not only made things much quicker, but it also helps to ensure that everything goes smoothly. All your direct debits and standing orders will be automatically transferred across to your new account, so you’ll never miss a payment. Better still, any payments made to your old account will be rerouted to the new one for up to three years, and the bank will contact the sender and inform them of your new account details. It’s normally best to do a bit of legwork yourself though, just to ensure that wages, benefits, and tax credit payment details are updated.
If you’re not transferring from an existing account, then making the right choice from the outset will save you any hassle further down the line.
Here are some tips to help you make the best choice:
1. Be prepared to consider ‘packaged’ accounts if they’re a good match for your requirements. These are really just current accounts with additional features such as breakdown cover or travel insurance included. If the features are ones that you know you’ll use, they can offer excellent value.
2. A current account isn’t a great place to store large amounts of money because you’ll earn very little interest on your balance, so you’ll probably want a savings account too. Linked savings accounts are a handy built-in feature of some current accounts, and make it easier to transfer money between the two. You may also qualify for reduced service charges and fees in this way.
3. If you know that your account has a habit of becoming overdrawn, then focus your search around providers that charge an interest rate, rather than a fixed daily fee for balances that are in the red. This usually works out much cheaper.
4. Busy households that have a large number of monthly outgoings covered by direct debits can benefit from the ‘cashback’ arrangements that are offered with some accounts. Each time you pay for things like broadband, your mobile phone, or electricity and gas using a direct debit, you’ll earn a percentage of this amount. Be aware that different rates may apply, depending on what the payment is for.
5. Some of the best deals require you to pay in a minimum monthly amount in order to qualify for the additional benefits. If, for any reason, you think you might not be able to meet this minimum then avoid these accounts as the benefits will vanish and the switch will have been pointless.
6. You’ll automatically be subject to a credit check from your new bank before they accept you as a customer. Just because one bank rejects you, however, doesn’t mean that they all will. If you know your credit rating isn’t great then be sure to keep second and third choices there as backups when you compare accounts – this will save you having to start your research over from scratch.
7. Most incentives from providers fall into two categories: interest rates and cash bonuses. Unless you’re planning to switch regularly, a high-interest rate account will normally provide the most benefit over the long haul, and from 6th April this year under new personal saving allowance rules you’ll be able to earn up to £6,000 in tax-free interest.
When you’re ready to start comparing providers, simply head over to our current accounts comparison page. Here you’ll find all the information you need to choose the right account for your personal circumstances, as well as securing a great deal with a new provider.
CLICK HERE to find out how you can bring down your non-mortgage borrowing debts.
