In these difficult times, choosing the right financial products has rarely been more important. Current accounts, often the portal to additional banking products, are at the head of this list. So, what should you consider when choosing the best current account?
One of the most important features of current accounts at the moment is their overdraft facilities. Of the current accounts available at the moment, the Halifax’s straightforward system will benefit many that require an overdraft larger than a few hundred pounds.
On top of a flexible 0% overdraft facility, the £1 per day charge on arranged overdrafts up to £2,500 means that the effective interest rate can be as low as 14%, considerably more competitive than the 19%+ borrowing charges found elsewhere on the high street.
Do you prefer to manage your banking online, or in-branch? Though many are now comfortable with internet banking, and are now able to benefit from secure 24/7 access to their bank accounts, it is not uncommon to require regular access to a branch.
If regular access is likely to influence your decision more, why not use the various banks’ ‘branch finder’ tools to discover where the closest branch is?
3. Cashback / Rewards
Some banks have gone out on a limb – by offering direct rewards for consumers in credit and/or making substantial deposits. Halifax’s Reward Current Account pays £5 for every month in which £1,000 is paid in, irrespective of the customer being in credit or overdrawn.
Santander’s 123 current account, meanwhile, is a more radical step in this direction, offering cashback on most household bills together with interest of up to 3% (on balances between £3,000 and £20,000), which currently surpasses many specialist savings accounts.
4. Access to Spin-Off Products
Banks face criticism for lack of loyalty to their customers, yet also for offering strong products solely to existing customers. This is leading them to think harder about how their products work together. There are no better exponents of this than Santander and Nationwide.
Santander’s account, detailed above, works in tandem with its own cashback credit card. Nationwide’s Flexaccount, though not innovative in the same way, is the gateway in to a sequence of strong products, including the Select credit card, the Flexclusive ISA and e-ISA (3.50% / 3.10%), and low-cost personal loans, which leaves few stones unturned.
Evading ‘packaged’ bank accounts, which were amongst the products that several banks were ruled to have mis-sold last year, some current accounts still do come with additional advantages.
Halifax’s Ultimate Reward account offers mobile insurance that has received an independent seal of approval, while Nationwide’s free current account offers complementary European travel insurance for customers that deposit more than £750 each month.
Time to Change?
Changing current accounts can be cumbersome, especially for a populace that is known for its unyielding loyalty to often undeserving banks. Nevertheless, in some cases, it may be the case that there’s enough reason to go ahead and make it happen.