Could you be getting a better deal?
Findings from the competition watchdog have revealed why we should be concerned about the deal we’re getting from our current account provider.
The Competition and Markets Authority, which is part-way through an investigation into the banking sector, has found that current account customers could be between £70 and £260 a year better off by moving to a deal that really suits their needs.
The watchdog found that by switching to the cheapest personal current account product, customers would save £70 a year on average.
People who often use an overdraft could be even better off by moving to another deal, the authority found.
Overdraft users could save, on average, £140 a year, while those who use their overdraft heavily would be about £260 a year better off.
While overdraft users tend to have the most to gain from switching, they’re also often the most reluctant current account switchers.
This might be because they’re worried about settling their debt with their existing provider or that another bank would not allow them to have an overdraft of the same size.
Even if you have a current account that doesn’t charge a monthly fee, it’s wrong to assume that means it’s ‘free’.
In reality, you could be losing out because you’re paying more than you need to in overdraft charges, or you’re not making interest on a balance that you could be getting if you shifted your money elsewhere.
Current accounts are big business for banks, which use the relationship they have with their customers to cross-sell them other products.
Personal current accounts generated revenues of about £8.7 billion in 2014, the authority found.
The watchdog is expected to produce a full report on the market next spring.