Newspaper article The Journal (Newcastle, England)

Switch to Keep the Current Flowing; Is Your Bank Account Up to Scratch? If Not, Vicky Shaw Suggests Moving to a New Product Could Be More Worthwhile Than You May Think

Newspaper article The Journal (Newcastle, England)

Switch to Keep the Current Flowing; Is Your Bank Account Up to Scratch? If Not, Vicky Shaw Suggests Moving to a New Product Could Be More Worthwhile Than You May Think

Article excerpt

Byline: Vicky Shaw

IT'S EASY to assume it's not worth your while switching your current account.

After all, there are so many different charges to weigh up, and many current accounts don't charge a monthly fee in any case, so why bother? Well, new findings from the competition watchdog have revealed why we should be concerned about the deal we're getting.

The Competition and Markets Authority (CMA), which is part-way through an investigation into the banking sector, has found that current account customers could be between PS70 and PS260 a year better off by moving to a deal that really suits their needs.

The watchdog found that by switching to the cheapest personal current account product, customers would save PS70 a year on average.

People who often use an overdraft could be even better off by moving to another deal, the CMA found.

Overdraft users could save, on average, PS140 a year - while those who use their overdraft heavily would be around PS260 a year better off.

While overdraft users tend to have the most to gain from switching, they're also often the most reluctant current account switchers.

This might be because they're worried about settling their debt with their existing provider or that another bank would not allow them to have an overdraft of the same size.

Even if you have a current account that doesn't charge a monthly fee, it's wrong to assume that means it's "free".

In reality, you could be losing out because you're paying more than you need to in overdraft charges, or you're not making interest on a balance that you could be getting if you shifted your money elsewhere.

Current accounts are big business for banks, which use the relationship they have with their customers to cross sell them other products.

Personal current accounts generated revenues of around PS8.7bn in 2014, according to the CMA.

The watchdog is expected to produce a full report on the market next spring. …

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