It will have no doubt come as a bolt out of the blue and a bitter blow for the 100,000 or so Norwich & Peterborough current account customers this week, when it was announced that the brand was being withdrawn from the high street.
Even more of a concern would have been the news that N&P current account customers would have to find alternative banking arrangements by the end of August this year.
No matter how upset and angry customers feel about this decision there’s little they can do about it.
The next job for the N&P ‘unwanted’ is to find themselves a new current account, but it’s not that straightforward.
There are many accounts to choose from, each with different strengths weaknesses and charging tariffs, so the task is trying to find the one that is most suitable for the way you run your day to day financial affairs.
Whether you are looking for a cheap overdraft, some credit interest on your balances when in the black, rewards for your loyalty or a perhaps a cheap debit card to use when overseas, hopefully this short guide will help point you in the right direction.
Low cost overdrafts
If you find yourself in the red for a number of days each month then perhaps an account offering a low cost overdraft facility should be your main consideration.
First Direct offers one of the most competitive deals via its 1st Account with an interest rate of just 15.9% EAR with the first £250 you borrow totally free of charge.
First Direct has a strong reputation for excellent customer service going back many years and whilst it doesn’t have its own high street presence, customers are free to use the wide network of HSBC branches without charge.
Other current accounts with low cost overdraft charges are M&S Bank 15.9% EAR with the first £100 interest and fee free. Alternatively the ‘Standard’ account from Post Office Money charges just 14.6% EAR and comes with the added benefit of 11,500 branches across the UK as well as online, phone and mobile banking.
Do you want to earn interest on your credit balance?
If you’re normally always in the black and very rarely need to use an overdraft it’s worth checking out accounts which pay you interest.
This sector of the current account market is nowhere near as generous as it once was, however Tesco Bank will still pay you 3% on balances up to a maximum of £3,000, TSB Classic Plus 3% up to £1500 and Lloyds Bank ‘Club Lloyds’ offers 2% up to a maximum of £5,000 although be aware you need to pay in £1500 per month with this account otherwise there is a £3 monthly fee to pay which wipes out a big chunk of any interest earned.
Current Account Rewards
Similarly you may be interested in an account which gives you rewards. For example Halifax will pay you £3 per month as long as you remain in credit, but beware overdrafts are expensive at £1 per day and even if you only dip into the red for one day you’ll forfeit your monthly reward.
Something a little more straightforward is the Co-operative Bank with its award winning Everyday Rewards option.. As long as you credit the account with a minimum of £800 per month, stay in credit or within your agreed overdraft, have a minimum of 4 direct debits and log on to online banking at least once each month you’ll receive a £4 reward.
On top of this you’ll earn 5p per debit card entry up to a maximum of £1.50 per month.
The 123 account from Santander is another account worth a look as it pays cashback of up to 3% on selected household bills as well as 1.5% credit interest on balances up to £20,000. The downside is that there is a £5 monthly fee with this account so it’s worth checking out the calculator to see if it works for you.
Barclays and NatWest offer rewards based accounts too but again both come with a monthly fee.
A cheap debit card to use abroad
This was the real strong point of the Norwich and Peterborough current account and was head and shoulders above most high street banks in this respect.
The next best debit card deal for non UK use comes from Metro Bank which offers fee free purchases and cash withdrawals within Europe but charges 2.5% and £1.50 per transaction in the rest of the world.
Another option is perhaps to select a different current account which is a good match for the way you manage your cash-flow each month and opt for a credit card for fee free transactions overseas – the most competitive cards come from Halifax with its ‘Clarity Credit Card’ or Creation Cards with its Everyday credit card.
Up front £100 switching freebies and incentives won’t apply
At the moment a number of banks will offer you £100 or in some cases more if you switch bank but these golden hello payments are only available if you bank is part of the official Current Account Switching Service (CASS) and unfortunately Norwich and Peterborough Building Society is not part of this scheme.
I hope this quick guide has been useful although I admit it’s not an easy task picking the most suitable current account, but hopefully I’ve given you some food for thought and perhaps pointed you in the right direction.