Switching current account: good or bad?

AdmanPea

Hi all

What's the feeling on this? I have semi-regularly switched bank accounts to take up introductory offers and I currently sit with Nationwide. My regular saver has matured and the year is now up. HSBC have an offer and, whilst the regular saver interest rate isn't great (same everywhere) it does at least have one. Technically, yearly switching could enable me to make a couple of hundred quid extra for essentially 'nothing'. However, I'm aware it isn't great for your credit score and, in reality, £200 isn't life changing.

Do you think regular switching is worth it or if you are happy with a bank do you prefer to stay with it? I like the 'idea' of Monzo but there doesn't seem to be much in the way of financial incentive to go with them.

Added to this, given the restrictions on regular savers, the amount saved isn't huge and moving this to another account might only lead to approx £30 a year in interest and it barely seems worth it!

eskbanker

AdmanPea wrote: »

Do you think regular switching is worth it or if you are happy with a bank do you prefer to stay with it?

These aren't really mutually exclusive - many on here stick with their favoured bank as their 'main' account and use spare donor accounts for switching incentives, so it's not an either/or situation.

However, sharing stories of such antics runs the risk of being pontificated at by the forum's resident self-declared moral guardian

https://forums.moneysavingexpert.com/discussion/6087464/interest-current-accounts

kuratowski

Just to add, your "credit score" is no good reason not to do something (or to do something). If you have a good credit history (no late payments, no defaults, etc) then there is no good reason not to open new accounts, or close old ones.

colsten

kuratowski wrote: »

If you have a good credit history (no late payments, no defaults, etc) then there is no good reason not to open new accounts, or close old ones.

Actually, there are many good reasons I can think of. For starters, I believe it is a sound idea to have more than one current account, and keeping money in them, with different financial institutions, to protect yourself against access issues with one of them. Other reasons are to avail yourself of the switching incentives, or being unhappy with the service / T&Cs of your existing account. Just about the only criteria which would not play a role for myself in the decision is my credit history. You cannot alter your credit history by opening a current account - history is history, and remains on file for 6 years in the case of credit history.

colsten

AdmanPea wrote: »

My regular saver has matured and the year is now up. HSBC have an offer and, whilst the regular saver interest rate isn't great (same everywhere) it does at least have one.

HSBC, alongside their sister banks FD and M&S, are still offering the best Regular Saver AER by a wide margin. Whilst there are one or two regional providers who might offer a slightly higher rate to a limited clientele, the vast majority of Regular Saver rates are way lower than the HSBC/M&S/FD one.

born_again

AdmanPea wrote: »

However, I'm aware it isn't great for your credit score and, in reality, £200 isn't life changing.

Do you think regular switching is worth it or if you are happy with a bank do you prefer to stay with it? !

It's not your score that you need to think about. It's your credit history (missed payments etc) that effect you.
So switch away and make money while you can. There are not that many banks in the UK and you will soon hit the "Previous account" so no switch incentive.

Like others. I have one bank that my main banking is through Santander 123 for the interest & cashback. Then other accounts that I can switch if needed.
In some cases a switch is not needed. Such as the Quidco TSB cashback offer. So that is a extra account gained with the £1.5K in with 3% interest. Just have a S/O to send & receive the £500 monthly requirement from another account, works well as it hits funding limits for both TSB & Santander 123.

jonnygee2

One reason not to keep siwtching your main account is that payments can start to get complex. If someone accidentally makes a payment to your account number that you've switched away from a few times, the payment will have to be routed through a few different banks to get to you.

If all goes well it'll end up in your bank account in a few minutes. But if something goes awry, it can become very difficult and time consuming to track down where the money is and establish a way to get it back.

That's one reason I'd prefer not to switch my main account more than once a year or so, and use a sub account to switch instead.