How to rob your bank

SANTANDER has brought back its switching deal, giving new customers £100 when they move their main current account to its offering which pays 5 per cent interest for the first year.

However, the bank has been voted worst for customer service in a string of surveys by organisations including Moneywise, MoneySavingExpert.com and consumer group Which?

Three-quarters of consumers have never considered switching their current account, according to Consumer Focus.

Michelle Slade at Moneyfacts, the financial data firm, says: “People are more likely to get divorced than switch their current account. Most people see it as too much hassle, but all the major providers offer a switching service where they transfer your regular payments for you.
“Getting the best deal is important, but so is customer service. If your bank isn’t up to scratch, vote with your feet and switch.”

So, which banks are top for what?

CREDIT INTEREST
A total 57.4 per cent of current accounts no longer pay credit interest, compared with 23.2 per cent three years ago, according to Defaqto, another financial data firm. These include main current accounts from Barclays, First Direct, HSBC, Nationwide, NatWest, Royal Bank of Scotland and the Co-operative Bank.

If you keep your account in credit, the Reward account from Halifax is the best option. As long as you pay in £1,000 per month, you’ll receive £5 a month. Unlike the Santander deal, this is an ongoing incentive, not an introductory offer.

Andrew Hagger at price comparison website Moneynet.co.uk, says: “The best move is to keep your savings in a separate account: not only will you get a better return, you’re less likely to be tempted to dip into your savings, too.”

OVERDRAFTS
If you go overdrawn, the Halifax account becomes expensive. It charges £1 per day for overdrafts up to £2,500, £2 a day over that and a hefty £5 a day for unauthorised borrowing.

Lloyds TSB started making a £5 monthly charge for people who use an authorised overdraft from December – and Norwich & Peterborough building society has followed suit.

If you pay in more than £1,500 a month consider the First Direct 1st account. It has an interest-free £250 overdraft (then a competitive rate of 15.9 per cent). You’ll get £100 to switch and a further £100 after six months if you are not happy and want to transfer away.

FRINGE BENEFITS
If you’ll make use of added benefits, so-called “packaged accounts” – which charge an average fee of £14.92 a month, says Defaqto – are an option.

The Privilege account from the Co-op charges £9.50 per month. You get an interest-free £200 overdraft, worldwide family travel insurance, mobile phone insurance and the chance to tailor the product by choosing an extra benefit from its “traveller”, “gadget” or “safeguard” options.

David Black at Defaqto says: “At the premium end of the market some accounts offer a concierge service, but look at the incentives and think about which are appropriate for you.”