Loyalty doesn’t pay when it comes to UK banks that rely on apathy to keep customers, research indicates

News - Banking

Written by Ray Clancy

Tuesday, 26 October 2010 08:28

When it comes to your finances, loyalty doesn’t always pay and shopping around for the best deal brings rewards, it is claimed.

For many Brits, remaining loyal to their main bank may seem an easy option with some offering tempting existing customer only deals. However, these so called exclusive deals are not always the best available, according to comparison site moneysupermarket.

It is warning that failure to shop around could be costing consumers dearly as no bank offers the best all round deal on all products.

In the current climate, consumers should focus on getting as much bang from their buck as possible. This means Brits checking their rates regularly, shopping around and making sure their money is working as hard for them as possible.

A little effort really can go a long way and consumers could potentially give themselves a large pay rise with just a few hours work, which could be used to boost their savings or help pay down their debts quicker.

Its latest research shows that it is extremely rare that one provider can offer the most competitive products across all areas and so it’s vital that consumers check their rates against other providers. For example, anyone using Halifax’s best buy Reward Current Account will get an excellent deal on savings products, but would be offered a loan rate of 9.9%, far higher than the 7.6% offered to new customers by Nationwide, available exclusively through moneysupermarket.com.

However, despite providing an excellent deal on loans, with Flex Account customers receiving a market leading of 7.5%, Nationwide only offers its customers 2% on its e-savings plus account while the current market leading deal is the Post Office’s Online Saver account paying 2.9%.

‘There is a misconception amongst consumers that they will get preferential deals from their current provider when taking out a new financial product. However, a look across the high street banks reveals that it is very much a case of swings and roundabouts, with no single provider offering best buys across the board. Consumers increasingly need to be aware of what is available from other banks and building societies and scour the marketplace to ensure they secure the most competitive products,’ said Kevin Mountford, head of banking at moneysupermarket.

‘It’s understandable that people want to keep their finances simple and the convenience of doing all their banking with one provider is often more important to them than securing the market leading rate for a loan or credit card. For others, they prefer the service provided by their bank but it still amazes me how many people are dissatisfied with their bank, but still remain loyal. Banks rely on this apathy from their customers and during this difficult economic period, consumers need to be generating as much value from their money as possible. We would urge Brits to get online, review their finances and avoid languishing on inferior rates,’ he added.