Is it time to switch your bank account?

Caroline Cassidy

It's fair to say that bankers aren't hugely popular amongst the general public these days but many of us still lack the motivation or inclination to switch accounts. But the truth is you may be able to get a better deal on rates and charges if you shop around for a current account.

Man at ATM machine
Man at ATM machine

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However, it's important to take a look at all aspects of an account before deciding what is best for you. For instance, if you are regularly overdrawn but tempted by a tasty-looking incentive, you may quickly find yourself paying sizeable overdraft charges.

Similarly, some banks offer extra benefits such as free travel insurance or breakdown cover... except many of them will charge you for the privilege.

Santander doesn't have the best reputation when it comes to customer services, but if you are always in credit the bank is offering a £100 sign-up bonus when you apply online using its Account Transfer Service. Thereafter you'll benefit from a five per cent in-credit interest rate on the first £2,500 you pay in during the first year.

To take advantage of the offer you will need a minimum salary of £14,700 and be aware that any cash paid in over and above that first £2,500 won't qualify for the five per cent interest offer.

Also good for those who never use their overdraft is the Halifax. With the Reward account you'll not only receive a £50 bonus for opening an account but £5 per month for each month you deposit £1,000 or more. But be warned - if you tend to use your overdraft, the Halifax is notoriously unforgiving and as of December 6 is replacing overdraft interest charges with fees.

And at £1 per day for an arranged overdraft of less than £2,500 or £2 per day if more, the charges will soon mount up. Slide over your arranged limit and you'll be paying a whopping £5 per day.

If you can deposit at least £1,500 a month into your account then the First Direct 1st account is worth a look. With a £100 bonus if you stick the minimum deposit for the first three months and further £100 if you decide to switch bank accounts within a year, it clearly makes customer service a priority.

Miss the minimum deposit though and you'll be paying a £10 monthly fee.

On the flip side, those who regularly use an overdraft facility may want to consider Santander's Preferred Overdraft Rate current account.

Switch to this one and pay in £1,000 per month and the bank offers 0 per cent on your overdraft for the first year. New customers will need to pass its credits score and the deal is only on offer to those using the bank's account transfer service.

But it also offers Santander bank account customers 0 per cent on credit card balance transfers for 13 months.

Remember - plenty of banks are offering incentives to switch and appealing interest rates but their terms and conditions or hidden charges may not provide you with the best option so always double check the terms of any offers and be sure to read the small print.