Banks today are always tripping over each other in order to try and make you switch accounts. You’ve probably switched bank account at least once or twice before in your lifetime, whether it was a savings or a current account.
Why do we feel the need to switch accounts? We’re always on a journey to try and find better service and greater rewards, but what is it exactly that makes a good bank account, or even a great one? This article seeks to illuminate what it takes to make a bank account worthwhile.
Step one: figuring out your needs
Before you start shopping around for a bank account, you should think about what your particular needs are and how to best meet them. The secret of finding a cheap and continuously rewarding bank account is to first figure out what you require.
If you’re a student, for example, it’s in your best interests to get a student bank account as opposed to a standard checking account, since there will be interest-free overdrafts and more assistance geared to students. This can be particularly useful given you’ll have to figure out how to study at university while not earning money.
On the other hand, if you dip into your overdraft frequently and your balance is usually under, you probably want to find a bank account that doesn’t charge very much for going overdrawn.
Step two: consider different types of accounts
If your needs are quite basic, you should consider opening a standard checking account. This will allow you to make deposits and withdrawals regularly, with relatively few restrictions.
Of course, if you want your money to increase over time, you will want to open a savings account that has an interest rate attached to it. A regular savings account has a fixed interest rate and is probably appropriate for those who want to save up over long periods of time, such as for a university fees fund for your child, for example.
Step three: calculate the costs
After you’ve had a bank account for around six months, review how much it costs to actually own the account. Do you have to pay monthly charges? Are they really necessary? How much is it setting you back?
You should remember that although a monthly banking fee may seem low, it all adds up over a year. You should also think about the incentives that come with your account, such as insurance and if it would actually work out cheaper to arrange them separately.
Step four: switching is easy
If you’ve realised that you’re being fleeced by staying with your current bank, don’t be afraid about switching because it’s surprisingly hassle-free.
It can also save you hundreds of pounds, so think about switching if you’re looking to save as much money as possible.