Staying loyal to one bank or building society doesn't always pay
Consumers who stay loyal to their bank or building society for all their financial products could be paying around £780 more over a year compared to those who shop around for the best deals, according to analysis by MoneySupermarket.
The analysis by the comparison site found when comparing the current best products (mortgages, savings, loans and current accounts) based on the actual cost over 12 months from each of the main high street banks, existing customers at Santander get the most value for money followed by Halifax and First Direct. However, by shopping around and electing for the best value deals on the market, consumers could save at least £784.06 in the first year compared to taking all your products with the same provider.
For example, anyone using the Lloyds TSB Classic Current Account with Vantage will get a reasonable, but not market leading deal on savings products, but will be offered a loan rate of 11.3 per cent, much higher than the 6.0 per cent offered by Derbyshire Building Society. Looking across all product areas it can be seen consumers should mix and match rather than stick to the same provider for everything.
Kevin Mountford, head of banking at MoneySupermarket, said: "For many people, keeping their finances simple and staying loyal to their bank may seem like a good option, however by doing this they are failing to make the most of their money. Our analysis shows loyalty doesn't always pay, and people who have a ‘one stop shop' for all their financial needs will not necessarily be rewarded. Banks cannot be competitive in every product area, so although one may offer a market leading current account deal, their savings or mortgage products may not be as generous.
"At a time when finances are tight, consumers need to make every penny count and ensure they get as much bang for their buck as possible. This means regularly checking their rates to ensure their money is working as hard for them as possible and scouring the market to check their products stack up against other providers.
"Switching to the best deals in the market is a quick and easy way consumers can give themselves a welcome pay rise with minimum effort required. This can be used to help boost savings pots or help pay off outstanding debt. We urge consumers to get online, review their finances and make sure they are getting the best deal for their needs."