In the first half of 2016, just 3,600 of us, or 0.06pc, switched our current account to another bank.
This is a far cry from the first half of 2014, when over 26,000 customers switched, although this was mainly due to the exit of Danske Bank and ACC Bank from the current account market.
“The main reason for inertia in switching current accounts is fear that something will go wrong,” said Simon Moynihan of price comparison site Bonkers.ie. “Many consumers are concerned that their direct debits will be cancelled and that they will miss important payments on their mortgage or energy bills by switching current accounts.”
The existence of the Central Bank’s Switching Code (designed to make switching current accounts easier and quicker for consumers) and the banks’ own efforts to ease these fears, such as with new types of current account, appear to have had little influence, he says.
“Until the fear of something going wrong is properly tackled, those low switching figures are likely to remain stagnant.”
A few years ago, consumers could avail of genuinely free-fee banking thanks to strong competition among a greater number of banks for new customers, but things are a little different now, especially with only six players in the market.
AIB, KBC and Ulster Bank are offering fee-free banking to customers, but only when a number of strict criteria are met. With AIB, customers must keep €2,500 on deposit at all times and with Ulster Bank, that figure stands at €3,000. With KBC, customers can avail of fee-free banking by lodging €2,500 every month.
Bank of Ireland charges a €5 quarterly maintenance fee to all customers, but will waive transaction fees for customers who keep €3,000 on deposit at all times.
Permanent TSB is a little bit different, says Moynihan. “With the bank’s Explore Account, customers are charged €4 every month, but this can be offset by the fact that the bank will pay back 10c on every debit card transaction. However, this is capped at €5 a month.
“So, it is possible to actually make €12 over the course of a year by banking with Permanent TSB, but customers will have to transact a lot.”
Contactless payments remain free of charge with KBC, Ulster Bank and Permanent TSB, while Bank of Ireland charges 2pc of the transaction value up to a maximum of 11.43 per transaction), while AIB is set to start charging 20c each from next month.
When it comes to credit cards, there are signs of increased competition among banks, with many now offering 0pc APR on transfers for a certain period of time, according to Moynihan.
The Bank of Ireland is offer 0pc interest on balance transfers for seven months on its Classic credit card, although it does have a rate of 22.1pc. KBC is offering 0pc APR on transfers for six months, with a rate of 18.25pc kicking in after that.
Permanent TSB are also offering six months of a 0pc APR on balance transfers, but with a rate of 20.7pc.
One of the best rates on the market is AIB’s CLICK Credit Card, which comes with 13.8pc APR, but this does not have any balance transfer option.
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