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Flurry of bank branch closures spur a third to digital accounts

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More than eight million customers have ditched branch-based accounts for digital, phone or post products as hundreds of locations are set to vanish from local high streets this year.

An estimated 8.4 million customers have switched from branch-based accounts to other types of accounts because the bank or building society they used to manage their money has closed.

According to Investec, half of adults have held savings in branch-based accounts in the past five years.

But given the spate of bank branch closures announced last year and already in 2023 – over 500 to close this year – for many there is no alternative bank or building society nearby.

As such, 30% have switched to digital, postal, or telephone-based account.

Investec revealed 58% of those closing branch-based accounts have done so in the past two years, with half transferring all their cash to a new account while 38% transferred some of their money.

On average, the accounts had £6,250 in them.

David Hunt, head of retail savings at Investec, said: “Branch-based accounts have been very popular, but bank branch closures are making it difficult for customers to manage their money which is driving huge growth for digital accounts which can be opened immediately online.

“They offer ease of access and are simple to set up and manage on an ongoing basis. Crucially they also offer the most competitive interest rates across the full range of accounts.”

Related: ‘Extraordinary’ month for savings rate rises but more to come: The top payers right now

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