20 February 2008
People who still have accounts with the ‘big five’ banks could save money and get better customer service by ditching them and switching to another provider, says Which? Money.
Just nine of the 64 Which? Money Best Buy* savings accounts, loans and credit cards recommended by the consumer finance magazine so far this year are available from the ‘big five’ banking groups – Barclays, HBOS, HSBC, Lloyds TSB and RBS/Natwest.
People could earn an extra £50 a year by switching their current account from one of the ‘big five’ to a Which? Money Best Buy**, and could save £220 by switching their savings account***. There are also savings to be made by switching cash ISAs, credit cards and loans to more competitively-priced products.
The ‘big five’ don’t score highly for customer satisfaction either. In a recent Which? Money survey, just 40 per cent of Which? members who held a current account with Barclays, HSBC or Natwest were very satisfied with their bank, compared to 80 per cent of Smile customers****.
Martyn Hocking, Editor, Which? Money, says:
“It would be easy to understand why people stick with the big banks if they offered good rates or excellent customer service, but our research shows that all too often this isn’t the case.
“If you’re still banking with one of the ‘big five’, then now’s the time to ditch your account and get a better deal – and better service – elsewhere.”
- Ends –
The full article “Time to ditch the big banks?” appears in the March 2008 issue of Which? Money magazine.
For further information, the full article, a copy of the magazine or an interview, please contact Nicola Frame.
* Which? Money Best Buys:
> Are widely available across the UK and can be purchased as standalone products
> Which? only includes savings accounts from companies that subscribe to the Banking Code
> Which? Money excludes any short-term interest rate bonuses that banks and building societies add to their savings rates to make them appear more attractive
> When picking Best Buys, Which? is the only organisation to take into account the way that credit cards charge interest as well as the interest rate, to show the true cost of borrowing
> All Best Buys are at www.which.co.uk/money
** Switching an average balance of £1,500 from a current account with one of the big banks paying 0.1 per cent interest on credit balances, to Which? Money Best Buy Cahoot which pays 3.65 per cent interest, could earn an extra £53 a year
*** Switching £10,000 from an average savings account with a big five bank paying 4.21 per cent interest, to Which? Money Best Buy ICICI Bank UK Hi Save Savings which pays 6.41 per cent a year, could earn an extra £220 a year
**** 42% of Lloyds TSB customers and 52% of Royal Bank of Scotland customers were very satisfied with their banks. The full survey results were in the August 2007 issue of Which? Money. In April 2007, 4,726 Which? members took part by post in a survey about their current account. 795 of the online panel of Which? members also took part. 4,680 responses were usable.
| Current accounts - no limit on monthly funding | ||
|---|---|---|
| Bank | £1 credit interest | £1,000 credit interest |
| Cahoota | 3.65% | 3.65% |
| Intelligent Finance (IF)a | 2.75% | 2.75% |
| Overall average rate | 1.78% | 1.78% |
| Big five banks - average rate | 0.10% | 0.10% |
| Easy access savings | |||
|---|---|---|---|
| Bank | £1,000 investment | £5,000 investment | £10,000 investment |
| ICICI Bank UK HiSave Savingsa | 6.41% | 6.41% | 6.41% |
| Bradford & Bingley Internet Saver 2a | 6.40% | 6.40% | 6.40% |
| Overall average rate | 3.71% | 3.93% | 4.04% |
| Big five banks - average rate | 4.06% | 4.07% | 4.21% |
| Cash ISAs - transfers in accepted | ||
|---|---|---|
| Bank | £3,000 investment | £18,000 investment |
| Scarborough BS Noticea | 6.30% | 6.30% |
| Icesave Easy Accessa | 6.10% | 6.10% |
| Loughborough BS 90 daya | 6.10% | 6.10% |
| Overall average rate | 5.35% | 5.40% |
| Big five banks - average rate | 4.99% | 5.37% |
