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If you want to open a new bank account, shop around

High street banks make it sound free and easy to stay with the same bank – but it isn't always, says FCA

Let's face it: nobody likes admin. If we've got an account with one bank, and want to open a new one, we stick to the same bank. We probably shouldn't, a new report from the Financial Conduct Authority says.

What it means: The report looks into how personal current accounts work in the UK.

One thing they've pulled out is that customers could be getting 30% to 50% higher return on interest – that's the money you get from the bank as a 'thank you' for leaving it in the account – if they just shopped around a bit more to find the best deal rather than sticking with the bank they're already at.

The report also showed that 30% of the money banks make from personal current accounts comes from people going into their overdraft – and the majority of those cases are generally just 2% of customers, who are often vulnerable people.

The FCA isn't okay with this – they say it's exploitative for the bank to have a system that's set up to rely on vulnerable people not making their payments. They'll be coming out with some more recommendations on how to fix the situation soon.

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Reader Comments

  • ClawV23

    So they’re more or less becoming homeless on purpose and taking advantage of people’s kindness? That’s very disappointing, I’ve always imagined myself walking on the path of the monk but my idea of a modern monk was to achieve a level of independence at which I can grow my own food on a piece of land I own, make my own hemp clothes and live in a small log cabin somewhere outside civilization instead of begging people for a bowl of food.