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Do the bank shuffle!

12 September 2013

Gocompare.com encourages unhappy bank customers to switch accounts, but check the fine print before falling for incentives.

The guaranteed bank switching service goes live next week when 46 million current account holders in the UK will be able to switch banks or building societies within 7 working days, and the banks are already gearing up to entice new customers through their doors.

Many of the UK's most well-known banks are willing to spend up to £125 to get new customers through the doors.

First Direct is offering a £125 switching bonus and Halifax is also offering £100 if customers switch to certain accounts. Other banks have added loyalty elements to their products such as high interest on -credit balances from Nationwide, and £5 a month from the Halifax reward account if you put a minimum of £750 in the account each month.

Other banks have launched cashback debit cards. The Royal Bank of Scotland has brought out its Cashback Plus debit card, which offers between one and 20% when customers spend in certain retailers, Santander has its 123 current account - which offers varying amounts of cashback on household bills, and Halifax has recently brought out its cashback debit card which offers mobile and online banking customers the chance to earn up to 15% when they shop in certain shops.

Gocompare.com's banking expert Matt Sanders said: "This new guaranteed switching service is great news for bank and building society customers. It will bring down the barriers for people to move accounts and should make the whole experience hassle free.

"It will also, hopefully, be a wakeup call to the banking sector that if a customer isn't happy with the service they receive they are more likely to speak with their feet and change providers."

Matt added: "Although the incentives to switch seem attractive it's really important to check the terms and conditions. In some instances you might have to hit a certain credit level for a defined amount of time, or you might have to pay a monthly fee for an account.

"Shop around for the best bank account for you and don't be swayed by a few free quid here or there. Make sure the account offers what you want and what you need.

"But don't be afraid to switch - there are guarantees and assurances in place which means that the whole process should now be hassle free and easy to do."

The switching scheme came about after a recommendation from the Independent Commission on Banking which found that people on average only changed bank account every 26 years and that it took around 30 days to switch.

The Payments Council is running the switching service and has drawn up the guarantee which nearly 100% of the market has signed up to. Whereas before it was up to the customer to change direct debits and standing orders, now this will all be done by the switching service. It also gives customers great peace of mind that, for 13 months after the switch, it will arrange for any payments made to an old account to be automatically redirected to the new account -. The switching service will also refund any interest and charges made on either new or old accounts if something goes wrong with the switch.

For more information on switching current accounts visit: http://www.gocompare.com/current-accounts/switching-bank-accounts/