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Bank Accounts = Confusion

Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
I was looking into changing my bank account but I've become quite confused about it all.

I currently have a Lloyds TSB Under 19s Account which is pretty handy for me. I get 3.30% Interest apparently, internet banking, text updates on my balance and a Visa Electron Card.

I then saw the RBS R21 Account which has pretty cool benefits I guess but apparently gives 16% interest :|

I'm not too sure whether it would be worth the switch. I also have to think about changing accounts later on this year too when i go to uni to get a student account so I don't want to switch to have to switch again.

Comments

  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    You can never switch too many times, it only takes three seconds to do it.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    does it have an effect on your credit rating if you switch bank accounts often though? or if you haven't been with your bank for very long?
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    i'm with RBS R21, really good. :yes:
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    i'm with RBS R21, really good. :yes:

    Do you think I should switch? Do they offer Internet Banking?
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    katralla wrote:
    does it have an effect on your credit rating if you switch bank accounts often though? or if you haven't been with your bank for very long?

    No, not really.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    Credit Ratings:
    There is no central database or fixed credit rating. Each bank or credit card company will credit rate you based on their own criteria. Obviously, this criteria is pretty much the same across the majority of credit card holders. Changing banks has little, if any, effect on this. Having large debts does have an effect on this.

    Bank Accounts:
    The questions you need to ask:
    (a) what your current financial state is,
    (b) what you think it will be in the future.

    If (a) isn't looking good, and (b) won't either, consider a student account with a good interest free overdraft. The Halifax Bank of Scotland offer a good account, and are rated highly, averaging £1920 interest free overdraft over 3 years. I'm personally with HSBC, who start you at £750 or 1000 (I think?) and go up in increments each year, and they have been good. However, if you're not good with money, I don't always recommend these - remember that some day you'll finish being a student, and that overdraft money needs paying back somehow...

    If (a) looks good, and (b) won't be so good, consider a savings account with quick access to your money, should you need it in the future. This way, you can earn good some interest on your money now (remember student accounts pay low to average interest), and then you can withdraw the money when you need it.

    If (a) looks good, and (b) looks good too (typically where you have a job), then consider a savings account which may stipulate a notice period for withdrawing money. If you don't need access to your money for a while, consider a cash ISA or something similar - these are tax free with quite good interest rates.

    This is by no means a hard and fast formula (as it's difficult to predict your financial situation in the future!). Plus you have to consider many other factors, e.g. does the account offer any other benefits e.g. young persons railcard? HSBC did for me, and whilst it wasn't the reason I went with them, it's certainly saved me a lot travelling home.

    I personally find that www.moneysavingexpert.com explains things well, and they too suggest and explain in plain English the types of accounts you can get, and their benefits and drawbacks.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    MSE is a fantastic site.

    I just signed up with cahoot, dont know why, banks are banks lets be honest, unless you've got a lot of cash to keep somewhere then any mainstream bank should do you :thumb:
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