Heavy price of loyalty to your bank

HALF of Australians do all their banking with just one financial institution, potentially costing themselves a lot every year.

Misguided loyalty, fear of the unknown and convenience are keeping almost 80 per cent wedded to the Big Four banks, new research by comparison website Mozo.com.au has found, and suggests it’s costing average customers $1600 a year – and some much more.

No single financial institution has a monopoly over the best value loans, savings accounts and credit cards, and Mozo director Kirsty Lamont said there was little reward for being loyal. She said many people felt switching was too much of a hassle but most would be better off “cherry picking” products.

“There are millions of Australians who could be losing thousands of dollars a year due to uncompetitive interest rates and fees,” she said.

“The switching process for banking has become a lot easier in recent years. In many cases you can do it all online now.”

Government regulations allow you to contact your existing bank for a list of direct debits and credits, then give it to the new bank, which will contact all suppliers with your new account details.

“It’s not really well known. I don’t think the banks promote it because they don’t want us to switch,” Ms Lamont said.

Mozo’s analysis of 117 financial institutions found that ME is the nation’s best-value bank, while Westpac is the best value among the Big Four.

Mortgage and consumer finance specialist Lisa Montgomery said some people felt switching would simply mean “more of the same”.

“We don’t prioritise it in our lives as being a thing that will deliver us enough value,”

she said.