Welcome to Money Tips Daily this is Money Kelly bringing you money tips to help you save and make more money!
Get A Cashback When You Switch Bank Accounts.
Better interest rates on your savings and a cashback are not the only the reasons to switch your bank account.
Thanks to competition regulations, switching a current account isn't as difficult as it used to be. Your new bank will take care of transferring Direct Debits and regular payments for you, usually within seven working days. However, if anything go wrong, your new bank will take care of any costs or penalty charges.
Here are just some of the offers available right now:
HSBC Advance Current Account offers a “Switch, stay and earn up to £200 cashback”
First Direct 1st Account offers up to £125 subject to you paying in at least £1,000 in the first 3 months when you apply via moneysupermarket.com.
TSB Classic Plus Account offers an interest rate of 3% AER on balances of up to £1,500 monthly provided you pay in a minimum of £500 each month, register for internet banking, paperless statements & correspondence.
Some premier accounts will also offer you annual travel insurance and other benefits, such as competitive credit cards, but may charge a monthly account fee.
These are just a few of the banking deals out there and most of the high street banks will offer you something to entice you to switch accounts. I'm not giving you financial advice, just information so you can decide which account is right for you.
You can check out all the deals on one of the many online comparison sites.
Of course, there are usually conditions attached to offers, and some are exclusive to their affiliate partner comparison websites, but they are still worthwhile if you're stuck in an old account paying low rates.
Higher savings rates
Don’t forget, there are also better rates to be had by switching your savings and tax free ISA accounts. Even if you go from receiving 1% pa to 2% pa that means you’ve doubled the return on your money.
Banks have a habit of making old savings accounts obsolete by dropping the interest rates, so loyalty does not always pay.
I found this out on an ISA account a few years ago. When I opened the account the rate was one of the best on the market, but three years later it was one of the worst!
A word of warning
One of the questions you’ll find on many loan application forms is, “how long have you been with your bank?”
Length of time with your bank, as well as current address or employer, does seem to affect your credit score as is points to your stability.
Also, every time you switch to new bank they will probably carry out a credit search which also leaves a footprint on your credit file.
By all means switch banks, but I wouldn’t be switching every few months just to get a cashback!
You can also ask your own bank for a more competitive account. Just tell them you’re thinking about moving!
I also look for the convenience factor of having a branch near my work or home. Whilst we do most things through Internet banking nowadays, there are still times when I need to visit the branch, for instance banking cash or sorting things out when the internet banking or my phone app goes wrong!
Keeping shopping around. Loyalty may not always pay, financial education always does!
Check out my Podcast episode "Get A Cashback When You Switch Banks" on Anchor! https://anchor.fm/charles-kelly/episodes/Get-A-Cashback-When-You-Switch-Banks-e16fk6