All The Best Deals In One Online Account
Want to sort out your finances? It might be a lot easier than you think..
One bank reported yesterday that 8.7m people have all their financial products with just one provider, and a further 8.3m would consider doing this. The reason given is to simplify logging on to online accounts, remembering passwords and contacting call centres. It wasn't a great surprise that the bank went on to say that you should consider it to be your one-stop shop.
For now, I'd just like to call this bank `Bank A'. Let's say you bank only with Bank A and have all its best products (which means you are a new customer, because old customers get much worse deals). Let's also say that your best friend has chosen the best products he can find from any provider. In these products, you both have:
- £1,000 in a current account at any one time, on average
- £3,600 in a cash ISA
- £5,000 in an easy-access savings account
- £100,000 outstanding on a repayment mortgage with 15 years remaining
- £2,000 outstanding on a 0% credit card.
Looking at Bank A's products and comparing them with the top products, your best friend will be more than £500 better off than you at the end of the year.
Next year, if you stay loyal whilst he again sits down at a computer for half a day to find the best products, he'll be even better off. That's because in a year's time your introductory deals will expire, and your bank will do what banks always do, which is worsen interest rates for existing customers. In two years it'll be even worse when your introductory mortgage deal expires, unless you renegotiate!
This £500 each year could be going towards your retirement, to charity, towards a holiday or towards paying off your debts. (If you have debts that aren't 0% deals, you probably shouldn't have £8,600 in savings accounts and ISAs!)
I shall name Bank A now for completeness: it is Abbey. However, don't now shun Abbey, because you will have a similar result whether you're loyal to Barclays, Lloyds, smile, First Direct, or anyone else.
This is not to say that individual products aren't good at Abbey or anywhere else. Many of Abbey's products to new customers are good or excellent. Abbey does, for example, have a very good current account that pays 8% credit interest on balances up to £2,500 for the first year.
The point is that by shopping around for the best deals you'll be much better off.
But that still leaves the 17m who either are loyal or are considering being loyal with a conundrum: how do they get the best deals and access all their accounts in one place?
Online account managers
There is a solution. There are a few companies, most notably Egg and First Direct, who have online services that are called `account aggregators'.
This means that you can visit Egg's Money Manager service or First Direct's Internet Banking Plus, and enter all your log on details for your various online accounts. Then, in the future, you can just log on to that one website and it'll allow you to access those online accounts directly through it. You need only remember the one password for the account aggregator. Please make it a good one (lower case and upper case letters, plus numbers), and keep it safe!
You must take out an Egg product in order to use its Money Manager service (although it has one of the best 0% on balance transfers deal at the moment, the Egg Visa card). With First Direct, you can sign up to its Internet Banking Plus service for free even if you have no First Direct products.
I've had some personal experience of account aggregators, and they've been ok for me. Pesonally I'm happy to log on to different websites, though. If any of you have experiences, please write a comment about it below.
> If you've been a customer to one bank for several years it's high time you shopped around to make yourself hundreds of pounds better off each year!