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| Jars with Dollars from Shutterstock |
It’s safe to say that, after the recent recession, it will
take many, many years before banks are able to establish a reputation that
vaguely resembles ‘consumer friendly’. The question is, how hard are they
actually trying?
The economic crisis from 2007-10, which was in many ways the
result of irresponsible lending from banks themselves, led to a bailout from
the taxpayer which peaked at £955 billion. And with the amounts of interest being offered by
most banks on current accounts and Cash ISAs in recent years having plunged
towards the derisory, they certainly haven’t endeared themselves to savers
since.
That said, there are some good deals out there for those who
are open to change in terms of who they bank with; not only in terms of new
customer rewards, but also the interest, insurance and overdraft rates they
offer.
Best deals for
switching
The good news is that changing bank provider isn’t the hassle it once was, and can be done in a week with
a minimum effort on your part. And with the marketplace becoming increasingly
competitive, there are some good cash offers for switching. First Direct offer
£100 straight off the bat, while M&S offer £100 in vouchers, plus £10 a
month for the first year.
Halifax offer £125 for switching, plus an extra £5 a month.
However, top of the pops is Clydesdale Bank, who hand out £150, plus guaranteed
2% interest on your balance. All of these will be contingent upon paying in a
minimum amount each month, but this shouldn’t exceed £1,000, so no need to be
alarmed.
Decent rates of
interest
They say a bird in the hand is worth two in the bush, and
getting cashback right away certainly has its appeal. But if you have a big
balance to switch across and are thinking more long term, rates of interest may
be more important to you. Santander do a decent deal of 3% interest (up to
£20,000) along with 3% cashback on bills, while Lloyds have a handy offer of 4%
on balances between £4,000 - £5,000.
For those with slightly smaller balances, TSB’s Classic Plus
might be worth a shout at 5% on up to £2,000, with the added sweetener of £5
cashback on the first £100 you spend each month, and a linked savings account
offering 5% (up to £250 a month).
Good insurance offers
Nationwide lead the way on this front, with their
FlexAccount offering free European travel insurance for those under the age of
75, and with good rates if you want to upgrade to make it worldwide cover
instead. Their FlexPlus account offers benefits such as worldwide travel cover,
mobile phone insurance and breakdown cover. The only catch is that you’ll need
to pay a monthly fee for this.
Best overdraft rates
If you’re often overdrawn, and getting fleeced for it, it makes
sense to switch and cut fees. First Direct are pretty good here, charging no
fee on the first £250 of overdraft (15.9% EAR thereafter). The other option is
to set up a Nationwide FlexDirect account, which charges 0% on overdraft
balances for the first 12 months. However, you will need to first check that
the overdraft limit matches the one with your current provider, as this type of
account charges a hefty £5 a day if you go over it.
So are the banks
winning us over?
It’s somewhat encouraging to see better deals out there,
although, it’s difficult to believe that such offers are from the goodness of
bankers’ hearts. Instead, it’s a sign of a more competitive industry, and not
just in the way of competition from rival banks. The alternative finance sector, which is
headlined largely by peer-to-peer lending platforms, has brought in a more dynamic and fair approach to consumer finance, and it seems it’s slowly beginning to
register with banks.
Either way, it’s all a bit more positive for us as members
of the public, and the more benefits and rewards that come our way, the better.
These deals are there to be taken advantage of, so don’t be shy to have a look
into it, and to start putting some pounds back in the pocket of you and your
family.
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