600,000 switch current account in last six months
There has been a 14% increase in the number of people switching current accounts in the last six months, figures from the Payments Council show.
More than 609,300 customers have swapped banks since September, when the seven-day Current Account Switching Service launched. In the same period a year earlier, 532,500 people moved their current account.
With 60% of Brits sticking with their bank for at least 10 years and a third having been with the same one for more than 30, according to research from Santander and Mintel, millions of us could be missing out on better deals to be had elsewhere.
So what's on offer? MoneySupermarket has been number crunching and found that the interest paid and charges levied by current accounts varies enormously across the market. Some accounts pay as much as 5% in-credit interest (such as Nationwide Flex Direct and TSB Classic Plus), others don't pay anything at all (Santander Everyday Current Account).
The Halifax Reward Current Account was found to be the best for in-credit interest. The minimum monthly deposit is £750 and as long as customers stay in credit, they receive £5 net of tax a month - or £60 over a year.
There is also significant variation between the accounts when it comes to overdraft charges. Some charge nearly 20% (Barclays and HSBC charge 19.3% and 19.9% respectively) for going into the red by any amount, while others offer interest-free buffers of up to £250 (First Direct 1st account).
The Nationwide Flex Direct (internet only) was named best current account for overdrafts by MoneySupermarket because it has a 12-month interest-free authorised overdraft, reverting to 50p a day afterwards.
For anyone considering using their current account as an alternative home for their savings, Nationwide and TSB are offering in-credit interest rates of 5% - that's more than three times the rate paid on the top easy access savings accounts which stand at 1.5% (West Brom Easy Saver Plus and Britannia Select Access Saver 4).
Some banks are also offering a 'golden hello' to new customers. Switch to First Direct's 1st Account or Halifax's Reward Current Account and you'll get £100, while The Co-operative Bank and Smile make a £100 cashback gift, as well as donating £25 to a chosen charity.
In terms of customer service, the current account providers Moneywise readers rated most highly are Smile and First Direct, which were the winner and runner up in our Moneywise Customer Service Awards 2013.
Kevin Mountford, head of banking at MoneySupermarket, said: "Six months on from the implementation of the Seven Day Switching Service the numbers are certainly heading in the right direction, with providers stepping up their offers and increasing competition in the market."
He added: "Switching is now quick and easy which, mixed with the fact that providers are ramping up their offerings, can only benefit savers. Customers who do not weigh up all these factors and move to the best deal suited to their needs only have themselves to blame when they miss out."
An overdraft is an agreement with your bank that authorises you to withdraw more funds from your account than you have deposited in it. Many banks charge for this privilege either as a fixed fee or charge interest on the money overdrawn at a special high rate. Some banks charge a fee and interest. And other banks offer a free overdraft but impose very high charges for exceeding the agreed limit of your overdraft.
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.