If you’re searching for a new bank account, whether it be your first or due to issues with your current provider then it pays to be in the know as to what the various market providers offer. Banking can be a pretty complex part of life, not least because of the hundreds of terms and conditions attached to each and every banking product. This guide will help make the process of choosing a bank account easier by telling you about the common pitfalls and discussing what other factors you should be considering when making your choice.
The common pitfalls of banking
The charges attached to bank accounts come in two forms: charges that are penalties and charges that are monthly, and provide additional benefits. For the former you should take time to find out about what charges a provider has in the event of going over an overdraft, having a bounced direct debit or making a late payment (in the case of a credit card).
Poor customer service
Unfortunately there is never going to be a provider that is completely free from unsatisfied customers, however, there are some banking providers who have an excessive amount of unhappy customers. Checking consumer review websites will help no end in finding a banking provider that has more satisfied customers than not and provide an insight into real world customer experiences.
Factors you should consider when choosing your bank account
The bank account switch process
Due to recent changes in banking legislation it is now easier than ever to switch bank accounts. These changes mean that any bank account switch should be completed within 7 days. As well as this you also have more protection if things go wrong (such as bounced or unpaid direct debits).
In case you need a bank account not only to withdraw and deposit money, but to get overdraft or cheque book, then basic bank account will not be suitable for your needs. Prepare to make some research and find out what are the interest rates, fees and terms offered from few banks at that time. Also what is the overdraft allowance and what rates are applicable to it.
Monthly charge accounts
If you’re considering a pay monthly bank account then you really need to consider whether the added bonuses that you receive are worth what you are paying. For the most part if you use everything that is packaged with the bank account then you’ll make a saving when compared to buying the services separately. However if you don’t, for example, holiday a few times a year to use the travel insurance, or don’t drive in order to be eligible for break down cover then you may want to opt for a free account instead.
Bank account switching bonuses
Many providers offer an added incentive in the form of a cash bonus if you switch your banking to them. This can see you making a significant profit (up to £200!). Check out what deals are on at the time of your switching, but also be sure to check out the provider’s reputation for good customer service.
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