It has been almost a year since the Current Account Switch Service was introduced and new figures from uSwitch suggest it has been successful in putting current accounts firmly on the agenda. Since its launch there has been a 276% increase in current account switches from last year.
The guarantee, which came into effect in September 2013, ensures that switching your current account is as fast and stress free as possible.
Encouraged by this ease of switching, new entrants such as M&S Bank, The Post Office and Tesco Bank have expanded into the current account market and are challenging the established banks to offer bigger and better current accounts, with several of these banks rising to the challenge.
New incentives to switch
For example, First Direct’s 1st Account, offers a £100 cash incentive to its newcomers, and Santander’s 1/2/3 Account offers monthly cashback on selected household bills and a 3% interest rate on balances over £3,000.
These offers have not gone unnoticed, First Direct was recently voted the best current account provider in the 2014 uSwitch Current Account Awards, and it was also credited with having a better switching service than any other bank.
Meanwhile, Santander’s innovative cashback gave it a boost up to fourth place – up from last place in 2013 – and win the ‘Best Rewards’ category.
‘More of us than ever no longer see our bank as a lifetime companion’
David Mann, Head of Money at uSwitch, said: “With the Current Account Switch Service anniversary just weeks away, this threefold rise in switching is a clear indication that consumers are taking control and making the banks work for them.
“Our research shows that six in ten customers have been with their bank for more than ten years, down from 72% last year – a further sign that more of us than ever no longer see our bank as a lifetime companion. This is great news for competition, as it means banks are going to have to work even harder to keep existing customers and attract new ones.”
What is the switch guarantee?
The switch guarantee was introduced on 16 September 2013 making it easier for you to switch from one current account to another.
In short it ensures that the switch takes seven days. You submit your details to your new bank or building society by completing a Current Account Switch Agreement form and they will confirm your switch date.
Within seven days all your incoming and outgoing payments will be moved to your new account. This includes Direct Debits, standing orders, and payments going in like your salary.