More Brits switching current accounts for ongoing value than upfront offers
Nearly a third of people (31 per cent) who plan to switch bank account in the coming year will do so for the specific benefits of the account such as in-credit interest, SMS alerts or longer branch opening hours, according to research from Santander Current Accounts.
By comparison, only a quarter (26 per cent) who have previously switched accounts did so because of specific benefits of the product on offer, as opposed to reasons such as setting up a joint account with their partner or being fed up with their existing provider. Santander says this is an indication that growing numbers of people are starting to look at the ongoing value they derive from their bank accounts more carefully.
The findings reveal that 17 per cent of those looking to switch in the next year will do so for ongoing benefits of the account, compared to 14 per cent who plan to switch for an upfront reward. Experts are warning switchers to avoid being swayed by one-off upfront incentives.
David Black of Consumer Intelligence commented: "People shouldn't be afraid to switch their current account by picking the one that works best for their circumstances. There are some very competitive offers around especially in terms of credit interest, where, almost incredibly, some of the accounts are paying better rates than many savings accounts. People tend to keep current accounts for a long period of time so it's always wise to try and weigh up the long-term value of any alternative account that you're considering."
Hetal Parmar, head of banking at Santander, said: "Do take the time to see if your bank account provides good value. If you plan to switch, it is important to consider the ongoing and longer term value of a new bank account, not just the up-front incentive that might be available.
"At Santander we like to give our customers ongoing value by paying up to 3% cashback on household bills paid by direct debit and up to 3% in-credit interest, which has been the case since we launched the account in March 2012. What's more, our simple, five-star rated switching service makes it easy to move to Santander."
Overcoming fears of a difficult switching process is also a key influencer for those looking to switch, with nine per cent of those who intend to change provider doing so because the new bank guarantees nothing will go wrong during the switching process.
123 Current Account pays cashback on household direct debits
1% cashback on water, council tax and Santander mortgage direct debits
2% cashback on electricity and gas
3% on mobile, home phone, broadband and paid-for TV packages
123 Current Account also pays in-credit interest
1% AER on the entire balance, once the customer's balance is £1,000 or over
2% AER on the entire balance, once the customer's balance is £2,000 or over
3% AER on the entire balance, once the customer's balance is £3,000 or over (up to £20,000).
People can find out more about the account and apply at santander.co.uk.