Iâ€™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 Iâ€™ve been earning practically no money on my current account at all.
So why didnâ€™t I change current accounts sooner?
Inertia. I donâ€™t like to run round like a headless chicken looking for the best deal all the time. (I donâ€™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, Iâ€™ve had good experiences with my new bank so far. The transfer has gone smoothly. Iâ€™m still paranoid that the payments will come out of the wrong account so Iâ€™ve left a healthy balance in each to ensure there arenâ€™t any problems. Iâ€™d go as far to say as Iâ€™d recommend it, but I donâ€™t want to do it again for a few more years.
- the impact of the credit crunch on savings accounts
- what is the Bank of England base rate and why is it important?
- how much money do you keep in your main account?