Put your pennies in the right place and make money
|
Jasmine's favourites
I have been through a few different bank accounts (I have four currently), and over the years I have decided that the most important thing for me is the level of service you get from your bank. This is why I always recommend First Direct for the excellent service they give. Their products aren't the best in terms of the interest they give when you're in credit, or their overdraft charges, but they have the best call centre of all the banks. It's in Britain for a start which puts them head and shoulders above the rest - and they bend over backwards to be helpful.
In fact, they are so confident about their popularity with their customers that they said recently that if you were so unhappy with their service you wanted to leave, they would give you £100 and would transfer your standing orders etc. for you. Now there's confidence! |
They say that we are more likely to get divorced than change our bank account. In fact, most of us open an account with the bank our parents were with and then stick with it for decades, moaning about the charges and the lack of service but not actually doing anything about it. Well, now is the time to ditch that abusive relationship and set up with a new banking partner. Go on - kick 'em into touch, it's the only language they understand. It's really not hard to switch accounts, particularly as some banks now offer a full switching service where they move your standing orders and direct debits for you. In fact, if you are really worried about missing bill payments or losing money coming into your old account then there's nothing to stop you keeping the old account open (with a minimum of money in it) while you use the new account for your day-to-day business.
We are all different and have different needs so a bank that is right for your friends may not be right for you. Follow these steps and you will be able to find the best one for you: Step one: In credit or need an overdraft?
Is your current account generally in credit? Then you need one that gives you a decent interest rate. An average current account offers an interest rate of just 0.1% but some will offer as even more than some top savings accounts . Have a look here for our recommendations of accounts that give you good returns on your money.
If you tend to use your overdraft regularly then it makes sense to go for an account that has low charges for overdrafts. See our recommendations here for current accounts with low overdraft charges.
If you are currently overdrawn, and you can't pay the whole lot off yet, you may still be able to switch your account. It depends on your circumstances, your credit rating and the attitude of the bank you want to move to. Certainly give them a try, although it would be best to go through Step two before you do. However...if you are not so bothered about a few pounds here and there and the most important thing to you is the level of service you are going to receive from your bank, then you should ask around your friends and family to find out who is actually happy with their bank (very few are) and which one they use. See the box below for Jasmine's recommendation for the bank she believes gives the best all-round service.
Step two: Check your credit record
All banks will look at your credit rating before granting you a current account - particularly if you want an overdraft facility.
It’s free and it will give you a good picture of how ‘viable’ the banks think you are. Another very good reason to check it is to make sure that it has your details correctly logged.
Go to Experian's homepage, where there is a green box entitled, “30 Day Free Trial”. Click on that box which will take you through to the registration page.
Now do this:
- Complete the registration.
- Note your details, including the credit file reference number.
- Your PIN should arrive in the post in several days.
- Use the PIN to log in online and check your credit record.
- Inform CreditExpert of any inaccuracies.
- Cancel your membership (so you don’t forget or get charged anything) by phoning 0800 656 9000 and selecting Option 4. You can email, but these are your bank details, so it's better to speak to someone on the record.
Step three: Consider the extras
Do you need to have a branch nearby? Do you need internet banking and 24-hour customer service (most offer at least the internet side of it)? Make sure the bank you want to move to has enough accessibility for you. Banks always try to get you to take out one of their premium accounts (with, maybe, a gold-coloured card and "extras" like travel insurance) but most are nowhere near worth the monthly fee (usually about £10-12). In fact, if you play your cards right and keep on top of your account by regularly checking it online or by phone you should be able to get free banking plus some interest each month. That's better than most bank customers around the world get so make the most of it. Step four: Choose and apply Here are our picks:
Current accounts for those regularly overdrawn
The best account is Alliance and Leicester’s Premier Direct offers an interest-free overdraft for the first 12 months. After that, authorised overdrafts (of up to £2,500) are charged at 50p a day, up to a maximum of £5 a month. This is a decent deal, even after the interest-free period ends.
Current accounts for those regularly in credit
The Alliance and Leicester’s Premier Direct is also one of the best for those in credit, with a minimum deposit of £1 and has a gross interest rate of 8.50% until the end of April 2009, when it reverts to the base rate less 1%. The high interest rate is paid on balances of up to £2,500 - after that it drops to a paltry 0.1%. If you think you're going to have more than £2,500 stashed away, you can also open a linked eSaver account, however, which pays 6.50% interest on the balance providing you don't make any withdrawals. If you do have money to spare, think about opening a high-interest savings account to keep in safe. See our best savings accounts article here for all you need to know. You could consider putting that money into an ISA. The Alliance and Leicester Direct Issue 4 ISA pays out 6% and requires a minimum investment of just £1. If you're worried you might be tempted to splash the cash then the ICICI HiSave Term Deposit fixed rate account offers an even more appealing 7% but will tie up your money for at least a year. On the plus side, the minimum investment is still just £1. What if you're a bit of both? Are you one of those people who's sometimes overdrawn, and sometimes in credit? If so, the Alliance and Leicester’s Premier Direct is a good bet as it pays good interest on balances in credit and is kind to those in the black - just check you're able to pay in £500 a month.
Getting Started
|
Print this page
