TO judge by the Central Bank’s latest consumer protection bulletin, Irish consumers are a very forgiving lot. Despite the scandals that have afflicted the banking sector, we all still tend to stay with the first bank we signed up with. However bad the marriage, we’re determined to stick it out.
According to the bulletin, 1,542 customers switched current account provider in the second half of last year. This is miniscule when you consider that we currently hold in excess of 5.3 million current accounts. The switching rate is the lowest observed since recording began five years ago.
Daragh Cassidy of price comparison and switching site, Bonkers.ie points out that these figures relate to the period before Ulster Bank and Permanent TSB hiked their current account fees earlier this year. For that reason, he would expect to see some increase in switching activity in the next set of numbers.
Cassidy still despairs of the unwonted loyalty of Irish banking customers. He says:
Cassidy believes that these latest figures are a signal to the Central Bank to take another look at its switching code of practice to see if improvements might encourage more switching activity. It’s worth pointing out however that 99% of current account switches were completed under the switching code within the prescribed times. Moreover, we continue to exhibit great confidence in current accounts in general. The amount held in current accounts has almost doubled to €31bn since 2013.
“Consumers should remember that they could save up to €150 a year by switching current accounts in some cases,” says Cassidy. “And while it may not seem like a huge amount, it’s better that the money is in your own pocket as opposed to the bank’s.”
Thanks to the aforementioned switching code of practice, the process of changing to a new bank is very straightforward.
The first point to make is that if you have an overdraft with your existing bank you’ll need to make sure that your new bank is happy to provide you with one too. Otherwise, you’ll need to clear your overdraft before switching. You then contact your new bank to let them know you want to switch your current account to them. They will then supply you with a switching pack.
Now, pick a switch date. This date should be a time during the month when there’s the least activity on your account so that you don’t miss any direct debits or payments. You’ll need to provide proof of ID and proof of address to your new bank as well.
Your new bank will ask you to complete an account transfer form. They’ll then send this form to your old bank, which will supply details of your direct debits and standing orders to your new bank in order to help make the switching process smoother. Any money in your old account will be transferred over to your new account. At this stage, you’ll need to confirm with your current bank whether you want to close your account or still keep it open. Under the terms of the code of practice, your new account will be up and running within ten working days of the switch date.
Daragh Cassidy says that the best value current account for you will depend on several factors such as how much money you’ll deposit into your account each month, how often you’ll use your account and whether you prefer to make payments in cash or by card.
“Whether you want access to features like an overdraft facility and mobile payments like Apple/Google Pay will also need to be factored into your decision too.”
One of the biggest and most popular banks in Ireland, AIB, has a great mobile app, and was one of the first banks to introduce both Google Pay and Apple Pay to the Irish market. In addition, it recently added Fitbit Pay to its portfolio of digital payments. However, unless you're prepared to keep €2,500 in your account at all times, you'll be stung with a host of fees and charges for using the account.
Though Bank of Ireland recently introduced a new cashback rewards scheme called ‘Live Life Rewards’ which is similar to AIB's ‘Everyday Rewards’, the bank has been slow to innovate where technology is concerned and has still not introduced Google or Apple Pay.
And like AIB, the account comes with some hefty day-to-day fees and charges, which you can only avoid by keeping €3,000 in your account at all times. But be warned; there is no way to avoid the bank's €5 quarterly maintenance fee - even if you maintain the minimum balance of €3,000.
With Ulster Bank, day-to-day fees can be avoided if you keep €3,000 in your account at all times, but as with BOI, you cannot avoid a monthly maintenance fee - €2 in this case.
Permanent TSB’s Explore Account is the only current account on the market that allows you to actually make a profit when it comes to fees. While there's a €4 monthly account maintenance fee (increasing to €6 from 1st August 2019) all your day-to-day banking is free and you'll also earn 10 cent back every time you use your debit card to pay for something in store or online. You can earn up to €5 per month through this feature alone, meaning you could offset most of the maintenance fee each month. However, the bank still doesn’t offer Apple Pay or Google Pay.
KBC is the only bank in Ireland to offer digital wallets from all the top technology companies: Apple, Google, Fitbit, and Garmin Pay as well as Sony's Wena Pay. And KBC was also one of the first banks to make it possible to apply for and open a current account online. With its Extra current account, all day-to-day banking is free if you lodge €2,000 a month. There's no overdraft set-up fee and you'll receive preferential rates of interest on KBC savings accounts and mortgages.
N26 and Revolut are the digital banking alternatives. They have no high-street presence and operate entirely online, with customers accessing their accounts via intuitive, user-friendly apps on their phone. Both banks offer free as well as premium accounts, for which you pay a monthly fee.
An Post launched its Smart Account two years ago and though it’s a welcome alternative to the banking sector, charges are a little high, with the most expensive maintenance fees (at €5 a month), ATM withdrawal fee (€0.60) and highest foreign exchange fees. However, all other day-to-day transactions are free and customers have the chance to offset these costs by earning money back by using their An Post debit card to make purchases in a variety of partner businesses.