The Post Office has revealed plans to break into the current account market this Spring, in a move it claims will make it one of the largest providers of financial services on the high street.
The new current account will only be available in a small number of Post Office branches at launch, with a widespread roll-out planned for 2014.
Do you usually stay in credit with your current account or use your overdraft? We analyse the rates to find the best bank account for you
What does this mean for banking customers?
There is little information so far about what the current account will look like, but the Post Office has revealed it aims to offer ‘simplicity, transparency and good value for money’. The Post Office will reveal full details over the coming weeks.
Greater accessibility for customers who want to be able to go into a branch will be one of the Post Office’s real selling points. The Post Office has 11,500 branches across the UK, which it points out is more than all the UK banks combined. Its new current account option could make it easier for those who live in rural areas to access their money in person and bank in branch.
Which? on the Post Office current account
Which? executive director Richard Lloyd said: ‘We welcome new entrants to the current account market to increase consumer choice and tackle the unhealthy dominance of the biggest banks.
‘More competition is desperately needed to force banks to genuinely compete for customers. But switching banks must also be made much easier and people will need to see real benefits from new providers to encourage them to move.’
High street financial services from the Post Office
The Post Office already offers a number of financial services including savings accounts, mortgages, credit cards and various insurance products to almost three million customers. It’s a Which? Recommended Provider for credit cards with a customer score of 79%, but scores less well as a savings provider with a 53% customer score. Its financial products are offered in a partnership with the Bank of Ireland and the new current account will also do so.
Nick Kennett, Director of Financial Services at Post Office says: ‘ The Post Office is undertaking a significant transformation, providing more and more essential services to our customers across mails, government and financial services. The introduction of the current account is a further statement of this ambition.’
Customers who would like to register their interest in a Post Office current account can do so by going to its website.
Finding the right current account
If you’re fed up with poor interest rates, expensive overdraft charges or bad customer service here’s five simple steps to help you find a better current account:
- Assess how you use your bank account – the best current account for you might not be the one with the best rate if you tend to dip into the red at the end of the month.
- Do you want to manage your bank account online or in branch? Think about if you are happy to do all your banking online, or if you prefer to see someone face-to-face in a branch.
- Is customer service important to you? Which? Recommended Providers for bank accounts have been rated highly by Which? members.
- Is it worth paying a monthly fee for your bank account? These are known as packaged accounts and charge a monthly fee in exchange for a range of ‘benefits’.
- Switch accounts with our step-by-step guide to switching bank account.
Get more detail on each step in our guide to finding the best bank account.
- Which? Money Helpline – for personalised advice on money issues call the experts
- Bank account switching tips – answers to your need-to-know questions
- Best current accounts if you always stay in credit– we analyse the rates to make it easier for you