Should you switch banks?

Built-in ATM machine with blank display on concrete background. Mock up, 3D Rendering

You can move to a different bank in just seven working days – and be better off as a result.

Many people have been with the same bank since they first opened it, and that means there's a good chance they're not on the best deal for them.

See also: Are you entitled to a Halifax payout?

See also: How Lloyds Banking Group plc could damage your financial retirement

With Easter weekend and the two May bank holidays all very close together this year, the banks are going to be closed for four extra days in the next eight weeks.

Of course, you'll likely get those days off too – but while the banks are snoozing, you should be looking to see if there's a better deal for you.

Easy bank switching

It's really easy to move your current account across to a new bank. Most high street banks are signed up to the Current Account Switching Service, and this scheme guarantees your balance and all payments in and out of your old account will be moved. Plus, any payments someone makes to your old account within the next three years will also be moved over.

It's free to use and your money will be transferred within seven working days.

However, you will have to close your old account if you wish to use the switching service.

What to look for in a new bank account

Do you choose a bank that's close to where you live? Perhaps you can make your money work harder for you elsewhere? There are a few different things to consider before you switch.

Can you pay less in charges?

If you're often going into your overdraft, approved or not, you might be paying for the privilege. If this is the case, find out if another bank charges less or even offers an interest free overdraft.

Can you get better interest rates?

The best interest rates on cash savings are all within current accounts. Some banks will even give you up to 5% interest. However, there are often restrictions in place to get the interest, such as having a certain amount paid in every month, or a limit to how much you can save and get the interest.

Some accounts will also give you access to exclusive regular savings accounts, again offering as much as 5% interest.

Can you get money back on bills?

Some banks will give you cashback on Direct Debits paid from your account on the likes of Council Tax, energy bills and broadband. However, they all come with a fee so make sure you'll earn enough cashback to justify it.

Can you get any extras included?

Other fees to think about are those charged on packaged accounts. You might pay a monthly fee for travel insurance or breakdown cover. It's worth looking to see if it's cheaper like this or cheaper buying separately.

Can you get a switching bonus?

One way banks are trying to get you to switch is to offer a cash reward. These payments can be as high as £150, though it's more likely you'll get something around £100.

Are there branches near you?

If you think you'll need to use a bank branch rather than just online banking, take a look at what ones are in your area, and search online to see if there are any plans to close nearby branches.

This article is provided by the Money Advice Service.

10 things your bank doesn't want you to know
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10 things your bank doesn't want you to know
Once you have opened a current account with a bank or other lender, you will get a steady flow of emails, letters (and maybe phone calls) offering you a savings account, loan, mortgage, ISA etc to go with it. But while it may be tempting to have everything in one place, it's better to do the legwork and shop around for the best financial products. You can compare interest rates on loans and savings accounts in the 'best buy' tables in the newspapers, or look online on comparison sites. Remember you can still easily transfer your money between accounts, even if they are not with the same financial institution. 
Whether you want to apply for a new mortgage or refinance an existing one, your bank will probably be very happy to give you an instant quote in the hope that you will go with them. They may not tell you that you can shop around at other lenders. A mortgage broker can give you an overview of the best interest rates on offer, and might be able to cut you an even better deal him/herself. 

Want to cash in your jars of change that are sitting on your shelves at home? Many banks are not very keen on coins. They often only take it from their own customers. You will have to sort it into different denominations and put the coins in the bank's bags in set amounts (for example, £1 for coppers, £5 for silver, etc). Some banks only take a limited number of bags a day, or won't take any at busy times. Others take a different view: HSBC has free coin deposit machines in many larger branches where you pour your jar of coins into the machine and it counts them and automatically credits your account. Barclays, NatWest and RBS also have machines in large branches in city centres.

Bank employees now have a duty to point out that they only advise on the bank's products and don't offer independent financial advice. What they won't tell you is that even the advice they give you about the bank's own products should be treated cautiously. Bank staff are often undertrained, underpaid and overworked. (You could ask for the employee's qualifications before getting advice.) So do your own research and/or find an independent financial adviser.

Nothing is set in stone. Your bank won't tell you this, but sometimes it will waive a fee, for example an overdraft or an ATM fee, depending on the circumstances. You have nothing to lose by asking, if you can argue persuasively why they should waive the fee. Citizens Advice says your bank should treat you sympathetically if you can show financial hardship.

As stated in the previous slide, some things are negotiable – such as interest rates or waiving fees – if you can make a good case for it. In that instance, talking to an employee in person is better than filling in a form online.

If your account is overdrawn and you get paid, your bank could use this money to pay off your overdraft without your permission. However, you have a right to ask them not to do this so you can pay your rent or mortgage first. This is called first right of appropriation. You have to ask your bank in writing, and you'll need to write to them with new instructions every time money gets paid into your account. Make sure you write 'first right of appropriation' in your letter.

If money is mistakenly credited to your account, your bank or building society can recover the money, assuming they do this within a reasonable time. But you may be allowed to keep the money, for example if you didn't realise the bank had made a mistake and spent the money in good faith. You would have to prove that you spent it in such a way that it would be unfair to ask you to pay it back. You can complain to the Financial Ombudsman if you think your lender is being unfair in asking you to repay the money.

If you do have to pay it back, you could try to reach an agreement with your bank to pay it back in instalments without interest being added.

The Financial Ombudsman Service has more advice on what happens when payments have been credited to the wrong account. If you did something wrong - for example, by entering the wrong account number - rather than the bank, the Financial Ombudsman may still uphold your complaint. They consider whether the financial institution made it clear to the consumer that only the bank sort code and account number are used to process the payment, rather than the name of the payee. They will also ask whether the lender should have realised that the consumer had made mistake, and once the problem came to light, did the firm take reasonable steps to try to get the money back from the recipient.

If too much is deducted from your account, your lender may have to refund the full amount of the payment. For example, if the money is taken through a direct debit or credit card payment for a hotel room or car rental. When deciding whether the debit was reasonable, the bank or building society will take into account your previous spending pattern. But the bank doesn't have to refund the payment if you agreed the amount beforehand or were informed of the payment by your lender at least four weeks before.

If you don't have enough money in your account to cover a direct debit payment, your bank may not make the payment. It doesn't have to tell you that the payment hasn't been made, so the onus is on you to keep checking your account. If, on the other hand, the payment goes through, you may be charged for an unauthorised overdraft.


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