Laura Whitcombe

Beat bank closures by switching to a better deal

Beat bank closures by switching to a better deal
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Within the space of a week, it has been announced that another 189 high street banks and building societies will be shutting their doors through the course of 2017.

Last week, Clydesdale and Yorkshire Bank outlined plans to close 79 branches. On Tuesday, HSBC reported it will close another 62 branches on top of the 55 previously announced. And yesterday, Yorkshire Building Society admitted it will be closing 48 branches, including all 28 Norwich & Peterborough branches as it goes ahead with killing off the brand completely. Existing N&P current account holders have been told to find alternative accounts.

The companies have largely attributed the closures to customers increasingly turning to their online services. However, if your local branch is affected and you would prefer a new bricks and mortar bank account, the good news is the Current Account Switch Service is at your disposal.

Set up in 2013, it enables customers to switch their bank accounts easily and pretty quickly between the vast majority of providers. Once you have identified where you want to move, you simply ask your new bank to move across your existing account using the service. It will do most of the legwork for you – such as moving all your direct debits and your overdraft – and it’s all meant to happen within seven working days. There’s also a guarantee element of the service that means should anything go wrong with the switch and you incur any fees, you’ll be refunded.

Yesterday it emerged that more than 3 million accounts have already been switched using the service since 2013, which is currently being advertised on national TV in a bid to get more of us moving our accounts. This is because the number of switchers only accounts for less than 5 per cent of the approximately 70 million active current accounts in the UK.

Last year, the Competition and Markets Authority found that nearly 60 per cent of UK bank customers had been with their providers for at least a decade and they could be more than £100 better off a year by switching  – or more if they don’t use an overdraft.

Some banks offer a ‘golden hello’ to encourage new current account customers. For example, The Co-operative Bank Current Account comes with a £110 opening bonus, while the Halifax Reward Current Account comes with £100. You might be put off HSBC by the closures announced but it will also pay you £100 to open its Advance Bank Account, as will its subsidiary First Direct (online and phone only) with the 1st Account. M&S Bank also offers new customers a £50 giftcard for opening its Current Account.

While these incentives may easily grab your attention, they may not be around for long. Personal finance website has found that by comparing what’s on offer today with last year’s deals, Halifax, M&S Bank and The Co-operative Bank have all reduced the amount they offer in upfront cash for switchers, while Smile and Clydesdale/Yorkshire Bank have removed their previous £150 upfront cash incentive entirely.

However, Rachel Springall from the website said: 'While it’s disappointing that there is less cash on offer compared to last year, this shouldn’t discourage consumers from considering a switch if they are on a poor deal, because there are still some fantastic offers around. However, consumers can only be certain of choosing the right current account if they assess the overall package, which can be time consuming.

'Customers who choose rashly could easily be handing back their cash perk in overdraft fees if they dip into the red for an extended period, thanks to the inflated fees some of these accounts can charge. As an example, the £100 upfront cash with Halifax looks appealing, but use the account badly and the monthly overdraft fee can make you owe them £80 in charges [annual charge based on using an authorised overdraft of £300 for 15 days a month].'

She added: 'Anyone who is still on the fence about switching their current account would be wise to consider switching soon, while the perks are still around, but they should remember to tread carefully and choose an account that addresses all their financial requirements, otherwise that cash sweetener could easily turn sour.'

Laura Whitcombe is knowledge and product editor at