Personal Accounts - Choosing Your Bank

While many people are with their bank because they're used to them or simply because it seems like an unwanted hassle to alter accounts, there can be advantages to shopping around. And just simply because you maintain your main account in one bank, there is no need to maintain all your accounts or credit cards with one firm.

If you have a poor credit rating or a large overdraft, you might find it harder to change banks, but some banks will 'buy' your overdraft from you, or offer to convert it into a loan. For a small fee you can request details of your credit rating from Equifax or Experian - the two leading credit reference agencies.

Convenience

Based on your circumstances, you might find you'd be much better off with one of the new internet banks, like Smile or Cahoot. These can give much better interest prices, because they have lower overheads than high street banks that have to run branches in 'real time'. On the other hand, you might rather stick with a large bank you know and trust - maybe you have a great relationship with your branch manager and can expect extra support when you require it. The bigger banks also have plentiful local branches, which could be a plus point if you need to, say, spend in cheques frequently.

Terms

Whilst interest prices are an important consideration, there are other factors to take into account when choosing a bank, such as bank charges. Some banks will charge more than other people, for example, if you exceed your overdraft limit or if a cheque bounces. Others will charge extra to offer you with copies of statements. Check that the bank complies with the Banking Code, a UK body that promotes best practise in the financial sector.

Bear in mind too, that some banks will offer superb terms for new customers in order to attract your business, so it might be worthwhile swapping just to take advantage of these. You might find a reduce-interest loan, for example, with a new bank.

Bank policy and corporate ethos

Some institutions offer 'ethical' banking, so that you can be certain your money is not being used to fund companies who do not conform to certain criteria. The Co-operative Bank led the way in ethical banking, but there are other banks and investment companies to choose from.

As nicely as the bigger high street banks, there are smaller banks, building societies and friendly societies to think about. While normally related with savings, some provide present accounts with attractive rates, and many of the new building societies are in fact indistinguishable from banks.

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