Would you open a Tesco bank current account?
Tesco Bank will need to work hard to convince people to open its soon-to-launch current account, according to research from switching website uSwitch.
The supermarket will add current accounts to its financial offering next year but one in two UK current account holders say they would rather stick with a high street bank rather than switch to a newcomer.
Michael Ossei, personal finance expert at uswitch.com, says: "Our research shows that one in five customers are unhappy with their current account provider, with excess charges, poor interest rates and in-branch queues the main gripes.
"For these people, the opportunity to switch to a new one with a familiar name may be a real draw. But almost half of consumers said they would still choose to hold their account with a traditional high street bank rather than an alternative like Metro Bank or a supermarket brand. So Tesco will have its work cut out in building enough trust to persuade people to switch."
However, Tesco Bank chief executive Benny Higgins is confident in the bank's performance so far. "Since 2008, we have invested to build a bank for Tesco customers. We now have more than 6.8 million accounts and offer straightforward, transparent products which reward loyalty and provide great value," he said.
The supermarket's bank - which it owns outright and already offers credit cards, personal loans, insurance, savings accounts and insurance – has yet to announce any details of the new current account but it will likely be linked to its Clubcard reward scheme.
The launch of new seven-day current account switching rules introduced in September has brought a range of new "challenger banks" to the market.
The first half of next year will also see the launch of Virgin Money's current account, with details still to be announced. Earlier this year Post Office entered the current account market, backed by Bank of Ireland, with the launch of three new accounts: a standard account, a packaged account, and control account.
This is more usually a feature of car insurance but it can also crop up in contents, mobile phone and pet insurance policies. An excess is the amount of money you have to pay before the insurance company starts paying out. The excess makes up the first part of a claim, so if your excess is £100 and your claim is for £500, you would pay the first £100 and the insurer the remaining £400. Many online insures let you set your own excess, but the lower the excess, the more expensive the premium will be.
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.