Why should you pay attention to current account offers
Current accounts are often overlooked and picked almost at random. Huge amounts of time and effort go into finding appealing savings accounts, loan deals and mortgage packages, but current accounts - the ones we use everyday - generally command little attention and only sparse research. Often people get the same bank accounts as their parents, or the ones that had the best student bank account and then they stay put for years on end. Few people switch current accounts even when they see better deals; the perceived hassle involved seems like a good enough reason not to bother.
But why do we leave our current accounts on the back burner? Is it purely because it's a hassle or is it because we don't care enough? A report last autumn from the Independent Commission on Banking made recommendations that all current accounts must be transferred within seven days and the overall process of transferring accounts should be made easier and more streamlined.
This deals with the 'hassle issue', but what about the apathy problem? Banks are garnering reputations for being reluctant to lend, so mortgages and personal loan rates are largely unattractive and hard to get. Savings accounts are also unappealing, which the banks blame on the low base interest rate set to 0.5% by the bank of England. But current accounts seem to be in a loophole. Some of the best current accounts out there reward you for saving and depositing regular amounts and offer free or low-interest overdrafts - the best of both worlds surely?
Current accounts with Santander are some of the most interesting and appealing on the market right now. Its brand new 123 current account is something fresh and inventive. You have to pay 2 GBP a month and you must deposit 500 GBP every month too, but for that you get 1% cashback on your water and council tax bills; 2% back on gas and electricity bills and 3% cashback on communications bills, including your mobile, broadband, TV and landline. Other benefits of these current accounts with Santander are the credit interest rates and overdraft options. You can get between 1% and 3% interest on balances from 1000 to 20,000 GBP and the overdraft facility on these current accounts with Santander is free for the first four months and 1 GBP per day, capped at 20 days, after the first four month. Plus you will never pay more than 95 GBP per month for your overdraft, even if it is unarranged.
With current accounts as good as this, there is little need to open savings accounts or take out loans for small amounts. It's always checking the current account market every year to make sure you are still getting the best deal. It may take a few hours of work, but if you can get an account that rewards you for saving and gives you a decent overdraft deal then surely it's worth it?
If you want to know more about the planned changes to account switching made by the Independent Commission on Banking, read this article from the Guardian.