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Bank account tips from a banking specialist

By Lucy Bower

1 June2021

Stack of UK pounds The future banking regulator, Andrew Bailey, raised speculation that free in-credit bank accounts could be on the way out, after calling free banking a 'myth'.

As the BBC reports, there are 55 free in-credit bank accounts available at the moment, although there are 65 packaged current accounts too - which typically come with a fee.

Defaqto's banking specialist David Black offers some advice to people considering switching bank accounts. Loyalty among current account customers is high and each year, only 4% to 8% of people switch their bank account.

Here are some of David Black's tips for choosing a bank account:

First of all, the kind of account you need will depend on how you're planning to use it, because the right account for one person won't be right for someone else.

For example, people who use an overdraft regularly will probably pay fees for it, so it's recommended they shop around for the cheapest one. Interest-free overdrafts tend to come with packaged (fee-charging) bank accounts or accounts that require you to pay in a certain amount every month.

Many people don't realise that it could be difficult to open a current account with an overdraft if you have a poor credit score. This means you might need to open a basic bank account (without an overdraft).

Mr Black also recommends checking whether you can bank online or in a branch, before you open an account. Some people prefer online banking prefer to manage their finances, whereas others prefer visiting a branch.

A spokesperson for thinkbanking commented: "The thinkbanking bank account offers online banking and comes with no credit check - it's available to UK residents aged 18 or over once they prove their identity. There is no overdraft and there's professional help to manage your money, which can make this an ideal bank account for budgeting. Once the account is up and running it costs 14.50 per month, or 21.25 for a joint account."

Image iStockPhotos / StockSolutions

Tags: bank, bank account, free banking, BBC, current accounts, overdraft, online banking

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