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Smaller banks best for interest and service

Earn 85 times more interest by switching

Twenty pound note and coins

If you’re not getting the most from your account provider, you should take your business elsewhere

Smaller banks are continuing to shame the ‘big four’ high street banks with better interest rates and superior customer service, Which? Money reveals today.

Our annual current account survey found you could earn up to 85 times more interest if you switched away from HSBC, NatWest, Barclays or LloydsTSB.

At the same time the big four are also lagging well behind in the customer service stakes.

While Smile topped our customer satisfaction poll with 88%, none of the big four scored more than 60% and all were rated below average.

Switching account

But despite this, less than than one in five of the 5,800 Which? members surveyed had ever switched current account.

Many feared it would be complicated – even though three quarters of those who had switched found it easy.

Which? Money has selected five Best Buy current accounts – Smile, Cahoot, Nationwide Building Society FlexAccount, Intelligent Finance (IF) and Alliance & Leicester Premier Direct. 

Which? Money editor Martyn Hocking said: ‘The smaller banks typically offer better interest rates and superior customer service, so it’s baffling why people continue to bank with the big four.

‘People mistakenly think it’s complicated to switch or that the extra interest isn’t enough to make it worthwhile, but with interest rates up to 85 times higher on offer, there’s plenty to gain by switching.’


Most of the accounts offered by the big four banks pay a paltry 0.1% interest on credit balances.

That equates to just 40p a year if you’re a basic rate taxpayer with an average balance of £500 in your account each month.

But if you switched to the Alliance & Leicester Premier Direct account you could earn £34 a year in interest.

It pays 8.5 per cent interest on balances up to £2,500 as long as at least £500 is paid in each month.

Customer satisfaction

Other successes in our customer satisfaction ratings were First Direct (85%), the Co-operative Bank (82%) and Cahoot (82%).

In contrast, Lloyds TSB achieved a 59% satisfaction score, followed by NatWest (58%), HSBC (57%) and Barclays (53%).

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