Andrew Hagger reflects on the latest current account switching data released by the Payments Council today.
Figures for the first quarter of 2014 show that Halifax and Santander are faring way better than the rest of the market.
Both banks have advertised heavily on TV and offer attractive current account packages, particularly to those customers who always remain in the black. The combination of a £100 golden hello and £5 monthly reward from Halifax looks as if it has struck a chord with customers looking to get something tangible in return for their custom.
Santander is pulling in big numbers too despite charging £2 per month for its 123 current account. The ability to earn cashback on direct debits will more than wipe out the account fee for many customers, whilst the 3% rate on balances from £3k up to £20,000 is no doubt a big plus point, particularly with savings rates in the doldrums. To get 3% on your savings at present means having to tie your cash up in a fixed rate bond for 5 years (Tesco Bank 3.10%) but with Santander you’re getting a double whammy of generous interest and instant access to your cash.
The best instant access savings accounts are paying 1.60% and 1.50% and most include an introductory bonus too – it’s no wonder more people are using their bank account as a home for their everyday savings.
It will be useful to see the switching stats from Tesco Bank and TSB in due course to see whether their enticing credit interest strategies are winning new business too.