plonkee money an english-er's thoughts on personal finance

March 2, 2007

switching current accounts

Filed under: banking and economics — plonkee @ 1:40 pm

I’m currently in the process of switching current accounts away from a very low interest bank account (think 0.1%) into a high interest bank account (think >5%). I certainly should have done this years ago, but better late than never.

I opened the original account when I was a student as it had the highest free overdraft facility at the time. I employed the tactic of withdrawing money up to the overdraft limit and depositing that into a high rate savings account. I then used the account as normal. Of course, I spent the overdraft and it took me until the point at which it was about to expire to pay it back. Since then I’ve been earning practically no money on my current account at all.

So why didn’t I change current accounts sooner?

Inertia. I don’t like to run round like a headless chicken looking for the best deal all the time. (I don’t mind doing it periodically.) I wanted to be sure that the account I switched to was likely to stay as a good deal having been burned with high interest savings accounts previously.

I also liked the customer service from the bank I was with. They have lots of branches and good telephone banking.

Fortunately, I’ve had good experiences with my new bank so far. The transfer has gone smoothly. I’m still paranoid that the payments will come out of the wrong account so I’ve left a healthy balance in each to ensure there aren’t any problems. I’d go as far to say as I’d recommend it, but I don’t want to do it again for a few more years.

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