"Bank accounts not for life," say analysts

05 April 2006
According to new research from MoneyExpert.com and Defaqto, up to 2.9 million people are thinking of switching their current account provider within the next year.

Competition in the marketplace continues to grow, with Nationwide Building Society the latest big name to raise the stakes, along with its interest rates, in the high street current account price war.

From the start of this month, interest paid on credit balances to a Nationwide current account will be 4.5 per cent, following similar deals from Alliance and Leicester (5.0 per cent) and Coventry Building Society (5.1 per cent).

Analysts foresee future deals and offers from rival banks and building societies up and down the high street in an attempt to woo customers into moving their everyday accounts.

Sean Gardner, chief executive at MoneyExpert.com, said: "Industry experts have long argued that current account customers are unwilling to move banks as they believe the switch will be too much hassle.

"However, this could be the year that customers finally start to wake up to the benefits of changing account and realise that a bank account doesn't have to be for life," Mr Gardner continued. "Banks and building societies are keen to win new customers and are making it worth your while switching so customers should respond."

The driving force behind the upsurge in those looking around for a better deal on their current account could be the amount of money accountholders have paid in penalty fees.

Defaqto's research shows around four million people were charged a penalty fee related to their current account in 2005, and they believe this has spurred consumers to seek out a more rewarding institution to look after their cash.

To read more information on current accounts, click here.

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