Switch makes sense, so plan your great escape now
WHEN it comes to switching bank accounts, we consumers are like someone who stays in an abusive relationship even when they really should break free.
We stick with our banks and keep taking the financial beatings, when what we should do is move to another.
Less than 11,000 people switched bank accounts in the second half of last year, out of a total of 5.4 million current accounts.
That works out at less than 0.2 per cent of those with a day-to-day bank account going to the efforts to move it to another bank, according figures compiled by the Central Bank looking at the number of accounts switched using the regulator's Switching Code.
The code is supposed to make it easier for consumers to move banks, and demands that the switch is completed within 10 days. It sets out that much of the bureaucratic work on the switch is done by the banks.
The tiny numbers of people switching is despite a huge hike in account charges and the decision of ACC and Danske Bank to pull out of retail banking here.
But more significantly, banks have ramped up the charges for most people who have a current account.
You will get hit with charges of between €50 and €100 a year for their day-to-day banking, unless you are a student, a pensioner, or have the financial wizardry of legendary investor Warren Buffett when it comes to money management.
Unless you are flush with cash, and maintain a balance of at least €2,500 a year, then AIB charges fees of up to 35c per transaction for current account holders.
This really mounts up.
Bank of Ireland has a quarterly fee of €5 whether or not the account is in balance. And customers are hit by fees of up to 40 per cent per transaction if they fail to keep at least €3,000 in the account throughout the quarter.
Ulster Bank charges €4 a month unless customers lodge at least €3,000 into their account or maintain a balance of at least €3,000 in their account.
The National Consumer Agency recently found one in three adults has been hit with new charges for using a day-to-day bank account.
And separate research commissioned by the Central Bank found consumers are confused and unsure about bank charges being imposed on them.
And people are resentful and cynical about banks, the research found.
Other surveys have found that those who have switched were positive about the experience.
It seems people find it too much hassle to ditch their expensive bank for one offering lower charges such as Permanent TSB or KBC Bank.
We give out a lot, but are prepared to keep taking the beatings from our banks when it comes to current account charges.
- Twitter: @Cweston_Indo
Sunday Indo Business