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Change your Bank Account.

Changing or transferring your bank current account is easier than you think. If you are unhappy with your bank or building society and they simply won't listen, consider moving to one that's more sympathetic (not simply pathetic). REMEMBER: Banks and building societies serve YOU, not the other way around. Many patients at the Surgery report that their banks have neglected to inform them when they brought in cashpoint charges, or lowered their interest rates on savings accounts. If things like this happen to you and you want it to stop, check out our Complaining page. If they still have trouble hearing, and many banks and building societies do, perhaps because of the anti-bandit screens separating them from us, simply take your business elsewhere. Then write to them telling them why you are leaving and how much extra business they are likely to lose and how many people you are going to moan to about CrappyBank's lack of customer care.

Please read on.

Most banks and building societies provide transfer packs these days, complete with advice and standard letters, some even provide charge-free overdrafts for 3 months. Here are typical steps to making the move:

First of all, we suggest that you don't close your existing account until you are satisfied that the new one is working without a problem.

  • Open your new current account. See How to...Open a Bank Account for assistance.
  • Apply for an overdraft and provide your bank or building society with 3 months' bank statements, evidence of your salary, an instruction to your employer to pay your salary into the new account using a standard letter (Not all banks or building societies insist on salary credit transfer at this early stage). When your application is accepted, they will arrange for the overdraft and 3 month account charge period. Make sure there is enough money in both accounts to cover any payments.
  • Following confirmation that the new account is open and you have the overdraft, request a list of direct debits, standing orders and any other regular payments from your old account using a standard letter.
  • Following receipt of a list of direct debits and standing orders from your old account, instruct the new bank to start paying your standing orders. This can be done either by ringing your new bank, calling into your local branch, or posting another standard letter to them. Once these have been set up on your new account, cancel your old standing order arrangements with a standard letter. For direct debits, use a different standard letter, photocopy it and send it to everyone you pay by direct debit.
  • Following receipt of your new direct debit intructions, complete and return new direct debit instructions to the appropriate organisations so that they can arrange for these to be set up on your new account. If you have regular credits, like dividend payments or child benefits, ask that they be redirected, again using a standard letter.
  • After 6 to 8 weeks, check that your salary, regular credits and regular payments have been actioned from your new account.
  • When all credits and debits are functioning correctly, use another standard letter to ask your old bank to cancel all direct debits that are paid from your old account. Close your old bank account and you can use another standard letter to transfer the remaining balance into the new account. Remember to send the old unused cheques and cheque guarantee/cash cards, cut in half through the hologram.

Thats it. OK, it takes up to three months but all you have to do is send the occasional pre-typed letter, check that regular payments/credits are functioning and that you have enough "float" to cover both accounts in the interim.
It is a nice feeling cancelling a current account with a pain-in-the-ass bank or building society. Money Surgery patients often recall the sense of smug satisfaction while handing the chopped up plastic cards over the counter, before walking out, never to walk back in. We recommend closing such an account in person.

Please read on.

Do keep an eye out for account opening incentives

A few patients of the Surgery, whilst in recovery, have taken advantage of the daftness of banks and building societies who sell new current accounts by offering rather juicy no-strings-attached incentives. One such patient aided her recovery immeasurably by signing up for a current account which offered £30 for 3 months salary credit, after which she closed the account, complying fully with the terms and conditions of the account. Not ashamed of her superior financial acumen, this person was amazed to read a similar advert 3 or 4 years later from the same bank offering £50 for new account holders. Again, she took advantage of this kind offer and her wallet is no longer in intensive care. Needless to say she is thankful that she does not own shares in that over-generous financial institution.

June 2001: This patient has closed the old account and has opened yet another as part of their incentive scheme. She will get another £50 in September, making £130 in total for three bank account openings.

September 2001: This patient has got another £50 and closed this account as well. A Gold Star goes to patient X.

Please read on.

Barclays Enters the £50 Current Account Cashback Market

(21:00 Friday 15th July 2005 news story)

Barclays bank is offering £50 to customers who open a new current account but the smallprint says "don't bother". The appallingly low interest rate, minimum £1,000 per month salary pay-in, £12 monthly fees (refundable after 10 months), lock-in and over-valued added extras really make the £50 sweetener taste a little bitter. If you're still interested, they're in the phone book.

Bank on the Run

(22:00 Monday 11th July 2005 news story)

NatWest are actually going west with a travelling bank service across rural parts of Cornwall from the end of next month. It's new "mobile van", as many vans are, will park up at set timetables, five days a week, around various towns across the county, providing basic banking facilities. Could this be money deals on wheels...maybe for people needing a financial MOT?

The van will be fully accessible and allow customers to cash cheques, make deposits, pay bills, check balances, order foreign money and talk, by phone, to mortgage advisers. You can also withdraw cash over the counter, so don't expect an ATM. ABS, PAS and SatNav maybe, but no ATM!

If successful, the bank hopes to extend its coverage, perhaps to parts of Wales, but promises that the service will not threaten existing rural branches. The proposals by NatWest come after a similar successful scheme operated by its sister bank RBS in rural parts of Scotland.

This venture has to be welcomed by customers and consumers generally, filling the void left by so many closures of permanently sited rural banks and post offices. It's probably safer than using the Internet and you needn't have to endure any Internet access costs too. So, fair's fair, well done NatWest.

Switch Banks to A&L and get £125

(15:40 Sunday 10th July 2005 news story)

Switch your bank account to Alliance & Leicester's Premier Plus and you'll get £25. Nice. Thanks, A&L. Now recommend a friend to do the same thing and you'll get another £50 plus your friend gets £50 too. Just goes to show how desperately they want current account custom, at all banks, not just A&L. The Premier Plus is also a decent account though, with market leading interest rates, low charges and a broad high street presence, although you must be able to pay-in your salary of at least £1,000 a month and sign-up for Internet operation. You can't just switch in and switch back, though: You do have to transfer your salary and direct debits and standing orders.

Banking Societies

(02:20 Thursday 12th May 2005 news story)

As far as we can tell, there are three building societies that offer current accounts.

They are:
Leeds and Holbeck,
and Norwich and Peterborough.
...Bless 'em.

Apparently, the wise buys on the Monopoly game board are the orange-coloured properties, Vine Street, Marlborough Street and Bow Street. In banking, however, there simply doesn't have to be a monopoly.

Countricide Committed by Banks

(18:00 Monday 9th May 2005 news story)

The murder of the countryside, can it be called countricide?, is being assisted by Banks' decision today not to introduce shared, or "unbranded", branches.

Up to 1500 communities are threatened by this rejection of proposals to maintain services which was presented to the British Banking Association (BBA) by the Campaign for Community Banking Services (CCBS).

The BBA argue that customers can use the Internet, telephone or mail to access services from rural areas, and say that Post Offices are enough. The trouble is that Post Offices carry charging ATMs, and the numbers of Post Offices is dwindling. It is unfortunate that the BBA push the responsibility for maintaining rural banking on the shoulders of the Post Office.

The idea of "unbranded" branches has proven to work successfully in the US, claim the CCBS, but this rejection by Britain's banks will allow rural communities to sink beneath the undergrowth in the name of profit. The CCBS, which is made up of 28 organisations, including Which? and Help the Aged, called the decision "blinkered". What will the Countryside Alliance make of this we wonder? We know what Which? magazine will say. They say that, as a result of this rejection, there will be nothing but fee-charging ATMs in rural communities, there will be no access to services for less able or elderly, and even more revenue for banks under the guise of extra charges.

To see where the charging ATMs are, visit here.

As far as Money Surgery can tell, banks are able to ignore these less-profitable customers because they appear to have a monopoly on current accounts. 95% of all current accounts are operated by banks, with 80% run by the "big five". We concede that the spread of the Internet is continuing and thereby lessening the need to maintain face-to-face banking services. We concede that many customers prefer to run their accounts this way. However, this "unbranded" proposal by CCBS was proven, workable and profitable, and dismissed. ...But there is an alternative.

They are called Building Societies. These are mutual companies, in other words they have no shareholders who demand dividends. Their members are their shareholders and their members are their account holders. These companies value their place in their local communities. Their ethos is primarily to serve local communities: Visit any building society web site and you'll read again and again of the real work they do in the community and of how they are proud to represent their respective localities. Some building societies offer current accounts. Browse a few. Search for those that offer current account banking and search for your local branch.

When you're ready to close your account with one of the big five, ask one of the tellers, face-to-face of-course, how many fingers you are holding up. Their answer, if correct, should not be "the big five".

People Actually Do Switch Banks

(20:00 Monday 11th April 2005 news story)

Nearly two-thirds of us Britons have changed our bank accounts, according to those dark horses Lloyds-TSB. Of those who have switched, 24 percent changed only once, 18 percent twice, while 2 percent of us have swapped over five times.

Women are more likely than men to be "serial switchers" and the survey also discovered that 24 percent of us are more likely to swap change their partner than their current account.

As a long-standing and fully house-trained Money Surgery Doctor, I recommend frequent reviews of your current account, compared with the best of the rest. Use to compare the market's latest. Ignore cash incentives to move. Take the cash and run, yes, but when the intention is to move permanently, look at the credit and overdraft rates, the full range of charges, the facilities offered, the convenient nature (such as Internet, postal, branch), and the locality of the account provider.

The Surgery Doctors are, on average, on their fourth current account and only move when they're really fed up with their account provider. To see the Money Surgery current account switching guide, see here. Happy switching.


(10:00 Sunday 3rd April 2005 news story)

When it comes to money, you need a place to store it. You need a cache for your cash. Obviously banks are better than the mattress, but the bank must be trustworthy and secure.

With the recent media frenzy over cashpoint (ATM) charges, we want to highlight how poles apart some banks and building societies are over their attitude to the people who store their money with them. More and more cashpoints are charging people to make a withdrawal, with average charges at £1.50p, and some charging £1.75. Also, we've learned that Royal Bank of Scotland has exploited this cashpoint charging by setting up a company purely to run charging cashpoints, Halifax has sold a tranch of its cashpoints to a similar company that operates charging cashpoints, Abbey is typically expected to follow suit, and the Post Office has three-quarters of its vast range of charging ATMs. BBC and ITV news highlighted the fact that most charging cashpoints don't specify what their charge will be until right before the customer withdraws their cash, by warning them on the screen.

These cashpoints automate the process of handing out the account holder's own money. While the money stays in the bank, the bank makes some interest on it and maybe passes some interest onto the account holder. But this automation saves the bank employing TWICE as much staff at branches. Charging customers ANYTHING to withdraw their own money is scandalous. It is a con trick. It is High Street robbery. But one company, as reminded by The Guardian, has continually acted as the consumer's champion on cashpoint charging, typical of many of its good value products and services. This is Nationwide Building Society.

They have had the most heated arguments with other members of the Link cashpoint network who have wanted to make all Link cashpoints charge for withdrawals, for quite a few years now, and must be relieved this week to witness publication of the Treasury Select Comittee's report into ATMs calling for regulations to PROTECT the customer's free access to their own money. When you pay nothing for taking out £20 from a cashpoint you have nobody but Nationwide Building Society to thank, and when you pay £11.75 to withdraw £10, you can curse Halif***s, Royal Bank of S**tland, or The P*** Off-ice. And don't forget to ask yourself, who do you trust with your money? - The consumer's champion or the profit exploiters?

HBOS: Have Banks 0 Shame?

(21:00 Sunday 6th March 2005 news story)

Does HBOS stand for Have Banks Zero Shame? We understand that they've increased the time that they'll take to clear cheques on basic current accounts from 3 days to 6 days. These bank accounts are taken up by benefits recipients and people on lower incomes. Between one account and the next, who has the money over the six working days? Certainly not the account holder. It's just another example of the way the banks are determined to squeeze out every penny of profit from ordinary people's money.

That 6 working days could span 2 weekends, making 10 days of lost interest and 10 days of gained interest for HBOS. Halifax Bank of Scotland was going to be one of the up-coming champions of competitiveness, challenging the dominance of the Big Four, as they were. Well, ladies and gentlemen, we have a Big Five. They collectively pay us a despicable 0.1% interest on basic bank accounts, see the bottom of the MoneyOscars voting page, then pull fast ones like this:

10 days interest lost on say a £100 cheque paid into an account with Halifax will earn them 15p, based on the 5% they can easily earn from lending in money markets or through mortgage lending. They pay you 10p PER YEAR in interest at 0.1% on that £100 cheque. THEY WILL MAKE MORE INTEREST IN 10 DAYS THAN THE CUSTOMER WILL MAKE OVER 365 DAYS FROM ANY CHEQUE PAID INTO THESE ACCOUNTS, SIMPLY BY DELAYING CLEARANCE. Whose money is it guys? These customers may be less able than most to realise that this is happening or to be able to complain effectively. They are likely to be more vulnerable than the average customer.

Here is a summary of the profits that some of our banks made:
HSBC £9.6billion
Royal Bank of Scotland £6.9billion
Barclays £4.6billion
HBOS £4.6billion
Lloyds TSB £3.5billion
Standard Chartered £1.1billion
Alliance and Leicester £0.6billion
Northern Rock £0.4billion
Abbey £0.3billion
TOTAL: £31.6billion

We've reported in earlier articles that our banks were likely to make over 30 billion pounds worth of profits (that's £500 per Briton). We were correct. And correct to regard this as excessive. We were also right to say that there is a need for an alternative to banks and that that alternative is building societies. Banks serve their shareholders before their customers. Building societies serve their customers.

Banks to Report £500 Profit on Every Briton

(Friday 18th February 2005 news story)

Britain's Banks are due to make AMAZING profits of £30 billion this year, when the big banks report their profits over the coming weeks. That's about £500 for every man, woman, child and anything in-between. This is a staggering figure.
It is quite simply enormous.
And we know why, although it may come as a shock to the average bank account holder.

The reason is that the banks effectively run a monopoly.
According to Don Cruickshank, who wrote a 300-page report into the banking industry for Gordon Brown in March 2000, nothing has changed from then to now, regarding competition in the banking sector. Back in 2000, his report claimed that the banks' sustained levels of profitability was a sign that they were operating in a complex monopoly and that their profits of £3bn to £5bn a year were "super-normal", which annoyed the banks at the time.

The government couldn't act on his report then, and make significant changes, because of a "regulatory contract" between it and the banks. Mr Cruickshank told the Guardian newspaper today, "Sustained and very high profitability is an indication that they are operating a complex monopoly and that on balance this is bad for the economy. In most sectors you would expect to get new entrants but in the UK if you want to be a bank, you've got to be a bank." He dismissed new players like Tesco because their license is actualy held by the Royal Bank of Scotland. Mr Cruickshank points to the 13-year run of economic good times which used to be experienced in 2 out of every 5 years but the old regulatory contract hasn't changed to suit. They are still being protected from the bad times at customers' expense. He is, however, opposed to a windfall tax on profits.

Mr Cruickshank's 5 year-old report is as relevant today as then, highlighting uncompetitive business banking, unregulated moving of money around the system, and a lack of promotion of competition from the FSA.

Against this background, what effect does this monopoly have on personal bank account holders? It would be reasonable to assume that, given this background, people who buy products from banks would be getting a poor value product. To make £500 a year from everyone in the UK, how on earth can they do that from your current account? That's your money in their hands, making them that £500 a year. Add in a savings account. You get good interest don't you? Don't you? Hang on, you're likely to buy the same bank's car insurance. It looks cheap enough. Here comes their big profit-maker... how about a mortgage with the same bank? They're very nice people aren't they, at the local branch? So why not get home insurance at the same time? Or travel insurance, personal pension, financial advice (free of charge), more savings, personal loan with repayment protection insurance, life insurance, pet insurance, credit cards - what's the rate, anyone? ...Endowment anyone?

You're beginning to see how they squeeze out that profit now, aren't you?

All we say is... £500.

Just think about it when you're next queueing to pay-in that cheque that takes 5 days to clear (5 working days that is).

Think about that next time you're charged £1.50 for withdrawing £10 through an ATM that saves the bank wasting their profit on staff costs.

Watch the news, read the headlines and look out for those record profits from HSBC, Barclays, Lloyds-TSB, Halifax Bank Of Scotland, NatWest, Royal Bank of Scotland...

Switch to Lloyds-TSB for Fifty Pounds.

(Thursday 10th February 2005 news story)

Lloyds-TSB is offering £50 to anyone who switches their personal current account to them. They promise to pay up within a matter of weeks of your first salary credit and they will asign a dedicated switching team to handle the transfer of all your direct debits, standing orders and account details for your employer. They'll even close the old current account for you.
Unfortunately, that makes the fifty pounds a lot less attractive.

We recommend that everyone gets the right current account for them. Be it one that offers high interest on credit balances, or maybe low overdraft interest rates for debit balances. Perhaps your ideal current account is one that offers low charges or it could be from a bank or building society that is close to home. Trawl the market, using the Internet, for the best account on offer. An Internet based account might be convenient for you and offer better rates.

Whilst we would not dream of encouraging people to play "Frogger" with dear old Lloyds, in other words to open and close accounts just to get the £50 incentive, we are aware that this can happen, which is probably why this bank has insisted that they will swap over the automatic payments and close your old account with the other bank or building society. This makes jumping back, and preserving your banking record, with the old current account virtually impossible.
Jumping to Lloyds-TSB, getting the £50, and jumping back might be worth the hassle to some wonderfully resourceful people, but probably not if the old account is shut-down.

There is another couple of banks offering decent current accounts with more modest cash credits: Alliance and Leicester at £20 for online applications, and First Direct at £25.
If any of these accounts get a good rating in the media, and they suit your requirements, then why not ask for more info? But please check all the account terms and conditions first.

Remember, though that switching current accounts is a tiresome task and "dedicated switching teams" are rare beasts. Having a captive, passive customer gives banks the extra incentive to post you more info on other products, like loans, cards, mortgages, car insurance, home insurance, pet insurance, travel insurance, currency exchange and savings, which may not be ideally suitable or good value necessarily but will definitely make the bank some profit. Lloyds-TSB is seeing its current account market very slowly eroded by upstart account providers like Internet-based smile, Cahoot and egg, and from highly competitive Alliance and Leicester and Nationwide Building Society. They need to expand their customer base at its heart - the current account.

And they'll get their £50 back pretty quickly...unless you're quicker at playing "Frogger".

Watchdog Slams Big Four Banks

(Wednesday 15th May 2002 news story)

The consumer magazine group Which? has called on the UK's biggest banks to end what it describes as the £500 million rip-off of their customers. Which? challenged the banks' chief executives to offer people 20 times more interest when their balances are in credit.

It also demanded a radical cut in overdraft rates in the latest phase of its "No Interest" campaign. The consumer group said its research suggested the big four banks rarely offer good value financial products. It wants Barclays, HSBC, Lloyds TSB and NatWest (now owned by Royal Bank of Scotland) to increase the rate of interest from 0.1% to 2% on customers' balances when they are in credit.

Helen Parker, the editor of Which? said: "Because most people don't switch, the big banks have no reason to change. "But customers have the power to make the banks take notice."

The criticism from Which? came as the heads of the four big banks were giving evidence to MPs about their treatment of business and personal customers. The government has already imposed price controls after accusing the banks of overcharging small businesses and making excess profits. The Treasury select committee, which is hearing the evidence, could make further recommendations to the government.

A&L not for Smarter Investors

STOP PRESS: A&L has now withdrawn their £50 offer after they visited this site!

(Thursday 9th May 2002 news story)

At the Surgery, we are very familiar with Alliance & Leicester, one of the converted building societies. Patients regularly report another £50 welcome gift gained from opening, and then closing, current accounts that have been funded with 3 months worth of salary cheques. A&L do not check up whether the customer has opened any accounts before, nor do they insist on fully transferring the customers existing direct debits and standing orders, which might make new customers stay with their new bank. One Patient at Money Surgery reports that they have now successfully got £200 in total from 4 account openings from A&L with no questions asked. They did not go for a 5th £50 because they were bored with doing it!

We have been expecting to read bad market news about Alliance & Leicester for some time, given that they are so undefended against our Patients' brilliant anti-debt raids, so it comes as no surprise to read about their poor performance in today's Times. Their gross mortgage lending rose by just 7%, compared with 37% for the sector as a whole. Their bank loan customer base increased by 8%, compared with 15% throughout the sector. Their Premier current account has increased sales by 50% but margins on these products are wafer thin. A&L seems to be struggling noticeably against its bigger rivals like Abbey National and HBOS, and it seems to be cruising for a bidder to put it out of its misery.

"Take Profits" argues the Times's Richard Irving. They certainly appear to be generous with their profits for opening current accounts, that's for sure. Is it worth loyal windfall share owners keeping the shares of such an overgenerous company?

Please read on.

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Please read on.
Saving Money: Switched on ways to keep hold of your precious cash.
Getting Money: Clever, barely legal ways of getting money.
How a house, open a bank account...
Future Dreams: Planning, after your debts have been eliminated.
Financial X-Ray: Let the nice doctors at Money Surgery X-ray your wallet.
Money News: The latest from the world of personal finance.
The best interest rates for saving and borrowing.
Feedback: Write to the Surgery.
Contacts: Other people who may be able to help, if we can't.
Money Surgery.