20The number of current account customers ditching and switching their bank or building society has jumped recently.
Some 341,075 switches took place between January and March 2023 – marking a 73% increase when compared with the same period a year earlier, according to the Current Account Switch Service (Cass).
The surge could be a sign of people looking to make their money stretch further, perhaps encouraged by an array of offers from current account providers of cash to switch.
Recently-launched switching offers include £200 from NatWest/RBS, which are part of the same banking group, and £200 from HSBC UK.
Cash switching offers can disappear as quickly as they appear, so if you are considering switching your current account, it’s worth keeping a close eye on what’s out there.
“These are difficult times, and a cash boost could really help those struggling to keep on top of their monthly bills,” says Rachel Springall, a finance expert at Moneyfacts. “It is simple to switch bank accounts using the Current Account Switch Service, which marks its 10th year in September since launch.”
Websites such as MoneyfactsCompare, MoneySavingExpert.com, Uswitch, Comparethemarket, Go.Compare and MoneySuperMarket can be handy for those looking to research and weigh up the different deals available.
However, like many things in life, there is no one-size-fits-all with current accounts, so it’s important when weighing them up to look beyond just the cash incentives on offer.
“Every bank account can offer different perks and charges, so its important customers pick the account that suits their circumstances,” says Springall.
“Some customers may want a competitive overdraft tariff, whereas others may be happy to pay a small monthly fee to get some cashback or benefits – so it really does come down to how someone spends or saves their cash every month.”
Some current accounts also come with linked savings accounts offering competitive rates of interest. Consider how you use your current account day-to-day and what aspects of it are really valuable to you.
Also, check the small print when it comes to cash incentives. You may need to wait for a certain period and/or fulfil certain criteria, such as paying in a certain amount and/or setting up some regular payments, before the money hits your bank account.
There may also be circumstances in which customers find they don’t qualify for cash-to-switch offers – for example if they didn’t complete the switch using Cass, or if they have recently held a current account with the bank they’re switching to. Terms and conditions will vary.
Pay.UK, which owns and operates Cass, says its research suggests that non-financial benefits are core reasons why people prefer their new current account to their old one, with online and mobile banking and customer service listed as the top two reasons for people preferring their new account.
But it’s also clear that the financial benefits are important too, with the interest earned and spending benefits found by Cass to be the third and fourth most important factors.
Cass has helped more than nine million switches take place since it launched nearly 10 years ago.
The service, which can be used by people, small businesses and small charities, was set up to help take the hassle out of switching current accounts.
John Dentry, product owner at Pay.UK, explains: “For customers, the process is simple – switchers simply need to choose a new bank account that better suits their needs, open an account with their new provider and ask the bank or building society to move using the Current Account Switch Service.
“Even if you have an overdraft, you just need to agree a new overdraft facility with your new provider, and we’ll do the rest. The Current Account Switch Service handles the whole process within seven working days and your bank will let you know once the switch is complete. On the agreed switch date, the new account will be ready to use and the old account will be closed.
“All incoming payments, such as your salary, and any remaining credit will be transferred over,” Dentry continues.
“Any payments made to your old account by mistake will be redirected by the service to your new account, so no need to worry about missing payments after the switch has completed and thanks to the Current Account Switch Guarantee, any problems that arise as a result of the process will be protected.”
Before switching, it’s worth ‘spring cleaning’ your existing account. If you’re no longer using some subscriptions, for example, it may be better to ditch them now rather than have them moved over.
You don’t have to use Cass to open a current account, but this would mean doing any legwork yourself, such as moving any payments over and closing your old account.
