You may not give two thoughts to your bank account; after all, it’s just somewhere your money sits before it’s spent, right? You may be surprised to hear that the UK is one of the only countries where you can get current accounts for free. It’s usual to pay for banking services in many other countries, so others are naturally more attentive of their current accounts and the services they provide for them.
The first thing you need to look for when doing a review of your current account, is the bank that it’s with. It’s likely that you’ve had the same account for some time, perhaps even since your teens. You may simply go through life not even considering the possibility of changing banks. In the last couple of months, a new switching initiative has been introduced in the UK which makes it much easier to change your current account from one bank to another. The switch must be made within 7 days under new guidelines, and protections have been put in place to ensure that you’re not left out of pocket.
Now is the perfect time to compare what each bank is offering, as they can face penalties if they don’t comply with the new rules, meaning that it’s likely you’ll have a smooth changeover should you decide to move. Some banks are offering a cash incentive when you switch, whereas others are offering perks like free overseas withdrawals or a good amount of interest if you meet a certain balance requirement.
You should also look at any ethical issues surrounding your current bank. In recent years, the way banks behave has been under scrutiny, with many being found to fund weapons and other less-than-favourable industries. If you don’t want to bank with someone who goes against your personal morals, then switch to a bank that you do agree with; vote with your wallet!
If you can, try to avoid going into an overdraft. Even ones which have been agreed in advance with your bank can end up being much more expensive than you may think, and unauthorised overdrafts are one of the most expensive ways to borrow. Some bank accounts will offer a free overdraft facility up to a certain amount (usually somewhere between £50 and £200), so if you like having the security of this, then these may be a good choice for you.
Even if you’re not looking to change your current account provider, performing a review of your account could prove very useful. Many of us have Direct Debits coming out which we’re not entirely aware of. Sometimes life gets in the way and we forget to cancel free trials, or payments to companies that we don’t need to pay any more. Some people may find that they’re still paying for credit that they’ve already paid off, or have been paying a monthly phone bill for a phone they no longer own. This could save you a lot of money in long run.
This article is a guest post by Coral Pearce-Mariner. For more top finance related tips visit the Loans4Tenants Blog.