To switch, haggle, or neither?

hadders93

Hi all,

I've been doing some long-overdue reviewing of my bank accounts and am thinking about whether it is time to switch my current account. I currently bank only with TSB, but set up my account long before the new £10/m rewards came into play - the only account benefit I get is 3% on my first £1500.

Having had a look online I've been thinking about switching to the Nationwide FlexDirect account (although this isn't set in stone). However, I have a few questions about this process as I've only ever banked with TSB and have never switched accounts before. So please bear with me!

1) Do I need to switch? If I could get that extra £10 a month from TSB that new customers are offered, there would be no point in switching. If I called them up saying I was thinking of switching, is it likely I'd be offered this in an effort to retain my custom?

2) How would switching my current account affect my other TSB accounts? I currently have a graduate account there which I want to keep for the overdraft, plus a monthly saver, plus a TSB credit card (which I barely ever use). If I paid my salary into a new current account, would they close or change the conditions on any of these other accounts? If my net balance with them was negative because I use their 0% graduate overdraft, would that impact my credit rating?

3) Could I just open a new current account in tandem? Would there be any advantage to setting up a separate new current account with Nationwide (for example), and keeping them both open?

Thanks in advance for any help. And sorry for the long list of questions - I've just started a new job so everything is a bit manic currently, and I wanted to seek some expert help before jumping into anything like this!

Neil_Jones

1)Nationwide FlexDirect doesn't have a switching bonus so you can keep the TSB account and just open the Nationwide account for the 5% rate and linked regular saver. Max it out and keep it at £2.5k and it'll reward you for the first year at an average of £10 a month.

1) a) If the T&C's say the £10 a month is for new customers only that's typically what it is, you could try phoning but you'll probably get told to go away. You can switch your account away and if the offer's still on in say 15 months time switch it back.

2) You need to check the T&Cs for eligibility to have the accounts in question and see whether you need a current account for those products - the regular saver does, so if you switch away that will probably be closed (it's only 2%, it can be beaten elsewhere, Virgin for example without your need to switch banks!)

3) Yes. In theory you can have as many current accounts with as many banks as you like providing you can pass their credit checks and other eligibility. It's common to have one account for everything and another that gets switched round every year or so - others have three or four. One post I saw was somebody with 7!

YorkshireBoy

Neil_Jones wrote: »

1)Nationwide FlexDirect doesn't have a switching bonus

Yes it does...

http://www.nationwide.co.uk/products/current-accounts/our-current-accounts/recommend-a-friend-tab

3) Yes. In theory you can have as many current accounts with as many banks as you like providing you can pass their credit checks and other eligibility. It's common to have one account for everything and another that gets switched round every year or so - others have three or four. One post I saw was somebody with 7!

Many here will have way into double figures.

colsten

YorkshireBoy wrote: »

Many here will have way into double figures.

double figures, starting with a 2 :cool:

Neil_Jones

"recommend a friend" and "switching bonus" is not the same thing. Plus it says on that page if your friend closes their account within three months the bank reserves the right to reclaim the payment from you both.

ICan'tStandIt

YorkshireBoy wrote: »

Many here will have way into double figures.

I really don't see the need for that many.

Few people can have a life so complicated that they need 10+ current accounts.

As for switching, it is always worth looking to see what is out there but it also depends where your mortgage is or if you want to move any time soon.

I wouldn't want to move bank accounts and then want to apply for a mortgage soon after.

YorkshireBoy

ICan'tStandIt wrote: »

I really don't see the need for that many.

On a money saving website? Really? How about current account interest (2-5% AER), access to regular savers paying 5% AER (5 off totalling well into 4 figures each month), other regular savers paying 2-3% AER, monthly Rewards, etc, etc. The alternative for me in a 1.xx% savings account would lose me a lot of money!

Few people can have a life so complicated that they need 10+ current accounts.

My life isn't complicated, yet I have 31 current accounts at the moment, down from a peak of around 40 a couple of years ago.

As for switching, it is always worth looking to see what is out there but it also depends where your mortgage is

Why does it depend where your mortgage is?

or if you want to move any time soon.

On that point I agree with you. I wouldn't make too many applications in the 3-6 months prior to a mortgage/remortgage application.

I wouldn't want to move bank accounts and then want to apply for a mortgage soon after.

The wise amongst us don't move long held accounts (my longest held is nearly 38 years old!), they open additional accounts and switch those.

ICan'tStandIt

YorkshireBoy wrote: »

On a money saving website? Really? How about current account interest (2-5% AER), access to regular savers paying 5% AER (5 off totalling well into 4 figures each month), other regular savers paying 2-3% AER, monthly Rewards, etc, etc. The alternative for me in a 1.xx% savings account would lose me a lot of money!

You must have a decent amount of money to start with then.

I don't see how someone on an average salary with a handful of payments for bills and rent / mortgage can have dozens of current accounts and them all serving a purpose. I can imagine someone having a salary going into one account and then passing through as a standing order in and out of a few accounts to try and qualify for something, but not the amount you have.

As for the mortgage issue, it's just always seemed logical to have your mortgage and current account in the same place. At least at first anyway. That way, when you need further lending they can see your history.

YorkshireBoy

ICan'tStandIt wrote: »

As for the mortgage issue, it's just always seemed logical to have your mortgage and current account in the same place.

Then you're restricting your mortgage to primarily banks, not building societies...as not many of them offer current accounts.

That way, when you need further lending they can see your history.

That's what bank statements are for.

When I took my first mortgage out in the early 80s, it was common to save with a building society first, before applying for a mortgage. But that was over 30 years ago, and things have changed since then.

ICan'tStandIt

YorkshireBoy wrote: »

Then you're restricting your mortgage to primarily banks, not building societies...as not many of them offer current accounts.That's what bank statements are for.

When I took my first mortgage out in the early 80s, it was common to save with a building society first, before applying for a mortgage. But that was over 30 years ago, and things have changed since then.

Internal scores that a bank would have on someone with a current account in regular use get used when determining further lending. They won't have that by looking at statements from another bank.

I think people always get further with the bank that holds the account which receives the salary.

takman

ICan'tStandIt wrote: »

Internal scores that a bank would have on someone with a current account in regular use get used when determining further lending. They won't have that by looking at statements from another bank.

I think people always get further with the bank that holds the account which receives the salary.

Banking is becoming more and more competitive and people are a lot more likely to compare products across different banks to get the best deals than they ever have. So i doubt banks will be turning down potential new profitable customers just because they have to look at bank statements instead of customer data already on their own systems.