Big bank transfer over rates and perks

MORE CURRENT account customers have been ditching and switching their bank following a wave of providers cutting rates or reducing perks on their accounts.

Some 248,302 switches took place between January and March 2017 according to payments body Bacs, which oversees the current account switch service.

This was higher than the 208,387 switches that took place between October and December 2016.

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In total, more than 3.7m current accounts have been switched since the seven-day service to make it easier for customers to ditch and switch was launched in September 2013.

Several current account perks were made less generous by providers around the end of 2016 and the start of 2017.

In August 2016, Santander announced that a three per cent rate on its flagship 123 current account would be halved to 1.5 per cent from November 1 2016 and other moves include Lloyds Bank cutting a rate from four per cent to two per cent and TSB reducing a rate from five per cent to three per cent. Halifax dropped its £5 monthly reward payment on its Reward current account to £3 in February. Tesco Bank has bucked the downward trend by guaranteeing to maintain a three per cent rate until April 1 2019, while Nationwide Building Society continues to offer a five per cent rate.

Figures from current account providers in the Bacs’ report also show that Halifax made a net gain of more than 28,000 current accounts being switched to it between July and September 2016 while HSBC, which includes Leeds-based First Direct, saw a loss of 14,648. Clydesdale Bank, including Yorkshire Bank, lost 7,716.

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A British Banking Association spokesperson said, “The current account market is very competitive and consumers are encouraged to shop around for a deal that’s best for them.”

The figures only cover customers using the current switching service, not those switching outside the service.

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