Find the right bank account for you

By Emma Simon 612AM GMT 09 March 2010

Metro Bank had the promissory note looseness rubber-stamped by the Financial Services Authority last week and when it opens the doors of the London branches in May it will be the initial new high-street bank for 100 years.

Virgin Money, that already sells credit cards and insurance, will additionally shortly be charity bank accounts, and it is at large approaching that Tesco and the Post Office will follow suit.

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But business fed up with high charges and bad make make make use of of of are urged not to wait for for these new "white knights". The new entrants aren"t expected to suggest deals as keenly labelled as the best-buy accounts today.

Virgin, for example, has pronounced it will assign a monthly price on the bank account, whilst Metro Bank says it will suggest "outstanding service" but admits business are doubtful to get the majority rival seductiveness rates. "Many could get a far improved understanding by switching their bank comment today," says Andrew Hagger of Moneynet.co.uk. As he points out, majority people still have their bank comment with one of the Big Four- HSBC, Barclays, NatWest (owned by RBS) or Lloyds Banking Group.

But these accounts typically compensate no seductiveness at all on credit balances, according to Moneyfacts, and assign 18.9 to 19.9 per cent on overdrafts. Many levy large charges if you crack concluded overdraft limits.

In contrast, it is probable to consequence up to 5 per cent on credit balances and get an interest-free overdraft for at slightest a year from Alliance & Leicester, First Direct or Halifax. What"s more, a little will compensate a �100 "golden hello" only for signing up.

These offers aren"t new; banks have been charity rival deals for at slightest five years. But couple of people are receiving value of them.

According to a new Santander survey, 7 in 10 bank business (34 million people) have had the same bank comment for some-more than 10 years, and are roughly positively profitable over the contingency as a result. What"s more, 3 buliding of those surveyed pronounced they had no plans to switch banks in the nearby future.

But consumers aren"t so demure to switch alternative monetary products. One in 4 had changed insurers in the past year and one in 9 switched their mobile phone provider.

Helen Bierton, head of stream accounts at Santander, says "Many people can see how majority they can save by switching their insurance, but they mostly don"t see the benefits of switching stream accounts." Bierton points out that savers could great �125 in seductiveness over the year and get a free overdraft. People switch their car word for a lot less.

So that comment should you pick? Much will rely on how you make make make use of of of your bank account.

Always in the red

Those who go overdrawn, even occasionally, should opt for an comment that pays the majority rival overdraft rate. Don"t get sidetracked by tantalizing in-credit offers as the great of these will be some-more than wiped out if you are profitable higher borrowing charges.

At benefaction the most appropriate deals are from Alliance & Leicester, Santander (which additionally owns the A&L brand) and First Direct.

The A&L Premier comment charges no seductiveness for the initial year, and offers free European transport insurance. After that it charges 50p a day for each day you are in the red, up to a limit of �5 per month. Santander (formerly Abbey) additionally has an interest-free suggest for the initial year nonetheless those who take this choice do not get seductiveness on credit balances.

For those with comparatively small borrowing needs, First Direct offers a �250 interest-free overdraft, that doesn"t end after twelve months. On incomparable overdrafts it charges 15.9 per cent less than the "Big Four" but not as rival as A&L, Halifax or Santander.

First Direct pays �100 in to your comment if you switch. However, this isn"t befitting for low earners, as you need to deposition at slightest �1,500 a month in to the comment and disaster to do so will meant a assign of �10 a month.

Keep in the black

Those who don"t make make make use of of of their overdraft trickery should combine on removing paid a lapse on the income they deposit. Again A&L and Santander lead the way, despite with short-term offers. Both compensate 5 per cent for the initial year on a limit of �2,500. After that they compensate 1 per cent still some-more than most high-street assets accounts compensate at present.

Martin Lewis, of Moneysaving expert.com, points out that First Direct and Halifax competence additionally be value considering, nonetheless their title seductiveness rates competence not see as attractive. The �100 "golden hello" paid by First Direct is roughly as majority as the �125 A&L business would consequence if they deposition the limit each month.

Halifax and Bank of Scotland both compensate �5 a month, supposing �1,000 is deposited each month. This is a prosaic fee, so it is value some-more to those who compensate the minimum.

Lewis says "An normal change of �500 equates to the �5 prerogative is homogeneous to a whopping fifteen per cent annual interest. Yet an normal change of �1,500 equates to only 5 per cent." This prerogative lasts for some-more than twelve months, great for those who don"t wish to keep hopping.

Value patron make make make use of of of

Most banks contest on rates, nonetheless surveys have shown patron make make make use of of of and removing a "fair deal" are some-more critical to customers.

It is here that the newer entrants are anticipating to win business from the Big Four. The new Metro Bank will open branches from 8am to 8pm 6 days a week and suggest Sunday and bank legal holiday opening hours. It aims to answer all calls inside of 3 rings.

If you make make make use of of of a bend continually it creates clarity to opt for a bank with a internal presence. But some-more of us right away opt to bank remotely. Ask about patron make make make use of of of prior to switching. What hours do the call centres work and where are they based? It can additionally compensate to ask friends or colleagues how user-friendly they find their bank"s online services.

Which? conducts unchanging patron compensation surveys and recommends a series of stream comment providers. These embody First Direct, Smile, Cahoot and Nationwide, all of that have a patron compensation measure of some-more than 70 per cent. First Direct is at 89 per cent, Barclays and NatWest 54 per cent, and Abbey, right away rebranded as Santander, only 48 per cent.