Half of Totally Money’s customers have been with the same bank for over four years, so millions are missing out on the benefits that can come with switching providers.
The most popular reason for staying loyal to a bank was already being happy with the service provided, as felt by 60% of respondents to the credit score company’s research.
Under a quarter (23%) said they had never considered doing so and the same number thought it would be too much hassle.
One of the benefits is cash bonuses offered for choosing a new bank. In the last week of September, both Lloyds and Nationwide announced switch offers for customers of £200 and £175 respectively.
To obtain the cash bonus, you will often need to transfer a few existing direct debits and deposit funds of up to £1,000.
But there are other perks including free overdrafts, favourable savings rates and other rewards that come with the deals.
Using the Current Account Switch Service (CASS) can make this a relatively speedy transaction too, as 99.7% of all switches go ahead within seven working days. The service also boasts a 91% customer satisfaction level, according to Totally Money research.
‘Always read the small print’
Alastair Douglas, CEO of TotallyMoney, said: “Changing banks might seem daunting – especially if, like many, you’ve been with the same provider for a few years.”
Douglas added: “But while the switching process is easy, you should always read the small print to make sure that the account is right for you.
“This is especially true if you’re looking to make the most out of a sign-up bonus – as you’ll usually need to jump through a few hoops to land it. Often, the bank will require you to deposit a certain amount, transfer a number of direct debits, and use your new card and app.
“Our message is clear – loyalty doesn’t pay, but changing who you bank with can. Not only could you be eligible for a sign-up bonus, but also an interest-free overdraft, better savings rates, cashback, fee-free foreign spending, and other rewards and perks.”
The finance expert also provided five areas to consider and his top tip from the providers out there.
1. Bonuses
- First Direct £175 switch offer – 7% on savings and fee-free foreign spending. But you are required to pay in £1,000, make five card payments within 45 days, and open the account in-app.
- Nationwide – Cashback up to £5 per year and 5% interest on a balance of up to £1,500. This needs you to deposit £1,000 and move two direct debits onto the account.
- Co-operative Bank – This has a £150 switch bonus and you need to make a minimum of 10 transactions, transfer two direct debits and set your new card up in a digital wallet.
2. Interest-free overdraft – First Direct’s 1st Account also comes with a £250 interest-free overdraft, which will mean a credit check will be run.
3. Savers – Kroo pays 4.1% on your current account balance up to £500,000.
4. Branches – Nationwide has pledged to keep every branch open until the beginning of 2028, so if you are unable to use mobile or online banking, this may be the switch deal to go for.
5. Rewards – Chase pays 1% cashback up to £15 per month, which could add up to £180 per year. Other perks include a 3.85% savings rate and free spending abroad. This challenger bank is only three years old, but is ranked in the top 10 banks for customer satisfaction.
