How I got an 8% savings rate

11 October 2011

For years, I’ve been rather unhappy with my current account provider Barclays. Not that it’s much worse than any other bank on the British high street, but after discovering it wrongly added payment protection insurance to my graduate loan nearly 10 years ago (yes, I’m still holding grudges) when I was fresh out of university (and yes, I got my money back!), I promised myself I would eventually change bank.

But other commitments meant it wasn’t until this summer that I could finally take the plunge and switch to my new bank of choice, First Direct.

But how did I decide it was the right bank to switch to? They’re all pretty much the same, aren’t they? Love to take our cash and then lumber us with hefty penalties should we even dare to go 50p over our agreed overdraft. Sorry, went off on a tangent there. So back to my decision to switch – there were three things that convinced me to pick First Direct.

Firstly, First Direct came top in our Customer Service Awards this year, in which more than 14,000 of you voted (thank you!). Who could be better at judging the quality of a bank than its own customers? I also have several friends who now bank with it, and they all say they’re happy with their switch.   

Secondly, First Direct offers £100 to switch, and if you change your mind, it even offers you £100 to leave. Who could resist such an offer?

However, it was the third reason that really made my mind up. While I am not overly fussed about which bank I have my current account with, in these times of low-interest rates and soaring inflation I am forever in search of a decent paying savings account. And First Direct’s 8% regular saver, which is only available to its current account customers, was like a shining beacon to me. With the current top-paying regular saver paying just over 4%, getting hold of an account paying twice that is pretty much unheard of. That was it; I was sold.  

How I made £100 from my bank

First Direct is not the only bank offering preferential savings rates to ‘loyal’ customers. For example, HSBC offers an 8% fixed regular saver to all its holders with a qualified HSBC current account. Many banks also offer preferential loans and mortgage rates to their existing customers. 

The lesson in this (if you can call it a lesson) is that, yes ‘shopping around’ is important when choosing a financial product, but so is checking that you're not missing out on any ‘exclusive’ deals offered by your current bank or building society. Hard to fathom in the world of financial services, but sometimes, customer loyalty does actually pay.

NOTE:  A few of you have been asking whether the First Direct 1st Current Account is a paid-for account, and I can indeed clarify that it is free to use. You have to have £1,500 coming in each month (your salary for example) but that is pretty standard. HSBC - which First Direct is part of - also offers preferential savings rates for some of their current account customer. However, to take advantage of that deal you will have to have one of their fee-paying accounts. Hope this helps.