Questions to ask a new bank

Questions to ask a new bank

In addition to all the obvious questions, such as the level of branch, online or internet banking services, interest rates, and standard charges, also consider asking following questions:

How will account managers deal with payments when there are insufficient funds in the holders account?

For customers that have been with a bank for a long period of time, the bank is less likely to return a payment if the account is a few pounds short, compared to a bank where the account has just been opened. Some banks operate with "shadow limits", where they will pay any items up to a certain amount, or they will allow the customer to go overdrawn by a certain figure (often around £10), without charging for it. The charges for sending a letter or daily-unauthorised fees can be extremely high, and unless the customer is the kind of person who is always comfortably in credit, they need to be aware of how the bank sets its fees.

Can the new cash cards be used in standard cash machines?

Most banks are part of the LINK network, which allows the use of any machine in the UK free of charge, although a new bank may operate differently.

Cards issuers in the UK commonly provide are Visa Debit and Maestro Cards (previously known as Switch). These cards can be used worldwide where the card issuers’ symbol is displayed.

Changing account needn't be like having teeth extracted

It has been said that the average man is more likely to change his wife than to change his bank account. Much of this is due to traditional fears about the difficulties involved in changing account numbers, cards, cheque books and payments over from one bank to another. Some banks make this much easier by providing an account switching service, and some even promise to pay compensation if things go wrong - although this is usually only to the tune of £10 to £25, which is small compared to the inconvenience such errors would cause. Before switching current accounts, make sure the new bank is clear in the assistance it can provide.

Alternatively, simply open a new current account and keep the existing one open. If the customer does this, bear in mind that neither banks’ will be keen to provide an overdraft nor other credit facility if they do not see a regular income coming into the account held with them. This should not be a problem if the customer is operating a joint account, with one salary paid into each account, although their borrowing ability will always be greater if they pay all income into the same account.

Basic banking issues:

• How much will the bank charge for operating the account / if it goes overdrawn?
• What are the interest rates for credit and debit balances? How much difference will this really make to the account holder during the year?
• Where can debit and ATM cards be used?
• Will the account holder be entitled to an overdraft, personal loan or credit card, and if so, how much will they be able to borrow?
• When are the branches call centres and websites open (yes, not every online bank operates 24 hours - for example, Lloyds TSB online banking closes for daily updates between 12 and 4am).
• Are there any additional services on offer such as insurance, or discounts?
• Does the bank have any ethical policies?