League desk: the financial institutions winning clients – and why
Official data shows Britons are flocking to Halifax and Santander, but ditching Lloyds 
Barclays, HSBC, Lloyds and RBS all lost more customers than gained last year
Halifax is the firm favourite for current account switches, attracting more customers than any other bank.
Figures released yesterday by the Payments Council – the body responsible for the switching service – revealed that the bank came out on top in terms of net gains, winning more than 65,636 customers while losing 24,078 in the first three months of this year.
Halifax, which offers £100 to those who switch, also gives Reward Current Account customers £5 a month in interest.
Santander and Nationwide also drew in a large number of new customers. They too offer attractive incentives, and some of the highest interest rates on the market.
Nationwide pays 5pc interest on balances up to £2,500 to those on its FlexDirect account , while Santander’s 123 account gives 3pc interest on balances between £3,000 and £20,000, as well as up to 3pc cashback on household bills, for a monthly fee of £2.
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It was not such good news for Lloyds.
Britain’s biggest bank has lost far more customers than it has gained, with more than 76,079 customers ditching the bank at the beginning of this year. These figures, though, cover a period before the official separation of Lloyds and TSB, and so reflect customers leaving both brands – and also include those who may have been moved to TSB as part of the split, but who chose instead to remain with Lloyds.
The data was also compiled just before the launch of the bank’s ” Club ” current account which pays an attractive rate of interest, at 4pc on balances between £4,000 and £5,000.
• Our expert’s pick of the best current accounts can be found here
HSBC, Barclays and NatWest also faired badly, with all three losing more than 27,000 customers in early 2014.
Andrew Hagger, a financial products analyst at Moneycomms, said: “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 3pc rate on balances from £3,000 up to £20,000 is no doubt a big plus point, particularly with savings rates in the doldrums.”
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The winners and the losers
Source: paymentscouncil.org.uk. The figures only include the customers who used the switching guarantee service.
Kevin Mountford, head of banking at MoneySuperMarket, said: “The data shows that Halifax, Santander and Nationwide have been the clear winners of the switching service so far, while various IT glitches and scandals have caused customers to act and vote with their feet.
He said that MoneySuperMarket’s own research has found that more than a quarter of people who switched were motivated by the in-credit interest rates on offer.
A Lloyds Bank spokesperson said: “The figures published for Lloyds Bank, from the start of 2014, include total switches for the two brands that were operating separately throughout the period, and are therefore not representative of past or current switching activity for Lloyds Bank.”
The Payments Council said there were 1.2 million switches over the past year. With approximately 49m current accounts in the UK, this means only around 2.5pc of people with current accounts switched bank in 2014.
Research by Telegraph Money found that, of the 1.2 million who have switched in the past year, more than 140,000 did so without using the switching service because they wanted to keep their old account.
The 10 best current accounts
First Direct’s 1st Current Account
Pays £100 to those who switch. The account charges £10 a month unless customers pay in a minimum of £1,000 each month or maintain an average monthly balance of £1,000. 1st Account customers can also open a First Direct regular saver account, which pays 6pc.
Best for… those who value customer service, and don’t mind internet and phone only banking.
Santander’s 123 Current Account
The Santander 123 current account offers cashback on household bills, paying between 1pc and 3pc on water and council tax, energy bills, Santander mortgage repayments, and broadband packages. This account also pays in-credit interest of 3pc for those with £3,000 to £20,000 in their account.
There is a £2 monthly fee on the account.
Best for…families, thanks to the cashback, and those with large deposits of up to £20,000. Plus anyone who wants to take out the 123 Credit Card, as the £24 annual fee is waived for the first year if a 123 current account is also held.
Lloyds Club Current Account
Club Lloyds customers earn up to 4pc interest on balances of up to £5,000. Two direct debits must be set up on the account. A £5 monthly fee is waived if the account is funded with £1,500 a month.
Customers can also choose one of three perks – annual Gourmet Society membership, six Vue cinema tickets, or subscription to one of a selection of magazines
Best for…those who have a high monthly income and want to take advantage of the high interest and perks.
Nationwide FlexDirect Current Account
The building society’s FlexDirect account pays an attractive 5pc interest for 12 months on balances of up to £2,500. The rate then falls to 1pc.
The account also offers a fee-free arranged overdraft for 12 months.
Best for…people who want good service and decent interest rates. Nationwide is an allrounder for those whose account is usually in credit.
Nationwide FlexPlus Current Account
For £10 a month, FlexuPlus account customers get breakdown cover, mobile phone insurance, travel insurance and free cash withdrawals abroad. The account also pays 3pc interest on balances of up to £2,500.
Best for…those who would otherwise be paying out for travel and phone insurance, and breakdown cover.
Tesco Current Account
Tesco Bank customers will be offered points via Tesco’s loyalty Clubcard scheme, as well as interest of 3pc on balances up to £3,000. However, the bank will charge £5 a month unless customers pay in £750 a month.
Best for… Tesco customers, and those who have a relatively low income and can still receive 3pc interest.
Halifax Reward Current Account
There is a £100 bonus for switching your account to Halifax, and monthly reward payments of £5, which are ongoing. To earn the £5 monthly reward you must deposit £750 each month and remain in credit.
The Halifax Reward Current Account has high overdraft fees, charging £1 per day on overdrafts up to £1,999.99 and up to £3 a day for £3,000 and over.
Best for…those with a smaller income, who can receive £5 a month for £750 deposits.
Marks & Spencer Current Account
M&S Bank’s current account comes with a £500 overdraft, with the first £100 interest-free. Unlike other M&S current accounts, this one has no monthly fee, and those switching to M&S will receive a £100 M&S gift card. Account holders earn one point for every £1 spent on their M&S Visa debit card in M&S (in store and online) and customers also get preferential rates on some M&S Bank products.
Best for…regular M&S customers.
Norwich & Peterborough Gold Classic Current Account
The account requires customers to pay in at least £500 a month otherwise a £5 monthly account fee will be charged. There is a £250 interest-free overdraft for six months.
Best for… overseas spending. The Bank offers free debit card usage abroad with no withdrawal charges, transaction charges or handling fees.
Clydesdale & Yorkshire Banks Current Account
The banks give 2pc interest on balances up to £3,000, however, a minimum monthly credit of £1000 is required.
Best for…those currently languishing in a low-interest current account.
Have you switched bank? Tell us why in the comments below
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