According to research by Which? 55% of people have never moved current account. It thinks people would be more likely to do so if they had portable account numbers. In fact we very rarely choose our own bank. That’s strange, isn’t it? Most people are with their banks because they have always been and their parents have always done their banking with them too. However, it’s an important decision to make, yet is not one that we seems to make for ourselves. If we’re staying with a financial provider because it’s easier than looking around for a better deal, we’re not helping ourselves at all. If we know there might be something better out there, them it’s time to move on. It can be intimidating to switch banks, but the process is easy if you break it into separate tasks, so follow these simple steps to switching you current account.

First thing first, it is worth it? So you’re dissatisfied with your bank. You may be angry, disappointed, and earning less than the national average. But does it make sense to change banks? It’s worth taking the question seriously before you move forward. If not then stay put.

Next try to find out which banks benefit your individual needs and which ones don’t. This may seem time consuming, but will be worth it in the end.  Once it’s up and running the better. You can’t switch banks unless you’ve got somewhere to go. Make a deposit into the account, wait for it to clear, and wait for your debit card to arrive.  If you have direct deposit going into your old account, start having those payments directed towards the new account asap. You may need to transfer money between your old and new account to cover any direct debits that are due to come out. There may even be a few mistakes along the way, but don’t worry! Try to keep your old account open for as long as you need to, then once you are sure there is nothing further attached to that account, close it down.

Banks love students. It’s proven that you’re likely to stick with the bank you choose for your student finances for life. It is also essential to open a student bank account for your time at University. So it’s a good idea to do this before you start University, especially if you are applying for a student loan as the money will be paid directly into your bank account.

There are different bank accounts available so shop around to find the best deal to suit your needs, like an interest-free overdraft or online banking service. It’s important to know which banks will be accessible to you when you’re at university or college, so check that there’s a branch on or near to your campus. Student accounts tend to be loaded with fresher-friendly deals, like interest-free overdrafts, discounts on computer equipment and music, and even rail discount cards. But don’t be lured by freebies alone. Take time to compare student bank accounts and find the best deal for you.

With mounting student debt, having a huge free overdraft if you don’t really need one can be seen as an unnecessary temptation. So a large free overdraft facility might not always be the best thing to go for. But for those that need it to finance their time at university it can be a helping hand, as long as you don’t fritter it away. Usually, with student current accounts, banks don’t charge account fees, but make sure you look into how long this will last. Some students have complained about banks charging them extra if they are overdrawn whilst at uni, or upon graduating, with banks bringing ‘new’ terms in. The truth is, these terms have always been there, it’s just a question of you understanding the information supplied to you.

Many banks have begun to offer customers the option of online banking, a practice that has benefits for both parties and whilst consumers view online banking as a quick way to pay bills and check their finances; online banking, at least to some degree, has become the norm for many simple bank transactions.

Online banking allows people access all of their account through a secure bank-created website. Depending on the services chosen, a customer may simply be able to view the day-to-day activity of every account they have with a bank. Another convenient service lets people transfer funds, either between accounts or from electronic transactions.

The biggest plus for banks to banking online is the price. Because Internet-only banks don’t have the expense of maintaining hundreds of local branches, their overall cost of doing business is lower than it is for their traditional counterparts. Which means they pass the savings on to their customers in two main ways: higher interest and lower fees.

Another big advantage is that you’ll have 24-hour access to your account, for free. Unlike your corner bank, online banking sites never close; they’re available 24 hours a day, seven days a week, and they’re only a mouse click away. Also if a money issue arises while you’re out of state or out of the country, you can log on instantly to your online bank and take care of business.

Accounts can also be automatically funded from a traditional bank account via electronic funds. Most direct banks offer unlimited transfers at no cost, including those destined for outside financial institutions. They will also accept direct deposits and withdrawals that you authorize, such as payroll deposits and automatic bill payments and any online banking sites offer sophisticated tools, including account aggregation, stock quotes, rate alerts and portfolio managing programs to help you manage all of your assets more effectively. Most are also compatible with money managing programs.

However f you’re new to online banking, it might take time to register for your bank’s online program. Or, it may be easier to physically fill out a form at your local branch and a traditional bank provides the opportunity to develop a personal relationship with that bank. Getting to know the people at your local branch can be an advantage when you need a loan or a special service that is not normally offered to the public. A bank manager usually has some discretion in changing the terms of your account if your personal circumstances change. They can help you solve problems such as reversing an undeserved fee or service charge.

Where does one go for financial advice nowadays? More and more, it seems that decent impartial financial advice isn’t easy to come by – after all, as impartial as people claim to be, quite often you can’t confirm this yourself.

Because of this, the best way to get properly impartial advice is to make as many enquiries as possible yourself. Your bank might tell you that they have a great deal on a loan or a credit card, but you might find that by making enquiries elsewhere, you could get a far better rate or deal on what you want, which is where services like price comparison sites can really play to your advantage.

Just by tapping in a few details and hitting that button, you can view details on a huge number of deals on the product you’re looking for, ranked to be as close as possible to the parameters you set in the first place, and many of which you can apply for directly.

Of course, this is all well and good, but who do you turn to if you don’t know what you want? Well, the advice given to you by your bank can normally steer you in the right direction, just don’t assume that they will be able to offer you the best deal – often they will be able to, due to a special “existing customer rate” or similar (This is often true for loans, as your bank has a greater knowledge over your financial dealings), but quite often it can be worth shopping around – especially in the case of cash ISAs at the moment, where some banks are offering just .05% interest rates and standard savers often offering little over 3% – Which, when you consider that, according to moneysupermarket.com: “A higher rate taxpayer needs an account paying at least 6.17% in order to earn a positive return [on their savings], while someone in the basic taxband needs to be earning at least 4.62%” Means that at the moment, finding the best place for your money is even more important than ever.

There is a lot to be said for carefully considering your financial position, learning about the different options available and then choosing the one most appropriate to you. True enough, this may not be the quickest way, but do you really want to rush into what could be a very important financial decision? moneysupermarket.com can make this decision easier, offering not only detailed price comparison, but a wealth of other information that can help you decide on what product and what type of account is right for you.

The UK’s Yorkshire and Chelsea building societies are said to be in “advanced talks” over a potential merger.

The Chelsea is the fifth and the Yorkshire is the second largest building society in the UK.

If a deal is reached, it would rival the Nationwide as big mutually owned mortgage and savings institution.

In August, Chelsea revealed a half-year loss of £26m after it had assigned £41m to cover to mortgage frauds.

The Chelsea has 35 branches and 700,000 members, while the Yorkshire has almost t three times as many members at 2 million and over four times as many branches, with 143.

The Chelsea building society announced, “the board of Chelsea has been undertaking a detailed review of the society’s activities, operations, financial position and corporate structure”.

“As part of this, Chelsea has considered the potential benefits to members and other stakeholders of a merger and this has culminated in discussions with the Yorkshire.”

The talks of a deal are being seen as a rescue package for Chelsea. New chairman Stuart Bernau has been analysing the business and viability over its independence.

In 2008, it reported a loss of £39m which was the highest recorded loss by a building society. £44m was written off due to huge investments in two failed Icelandic banks.

Another £15m was written off by the Chelsea after buying a mortgage broker in 2007 whose business collapsed during the credit crunch.

Building societies differ from banks and stock-market companies, as they are owned by their members, and struggle to regain reserves if they suffer heavy losses.

The Chelsea went on to reveal that “for a merger to proceed, the boards of both societies would need to be satisfied that it will be in the benefit of each society’s members”.

“The merger would also be subject to approval by each society’s members and the FSA.”

It has yet to be revealed if a merger would provide a windfall to the members of both societies. A spokeswoman for the Chelsea said that such details were yet to be discussed.

Several takeovers of building societies have been made since autumn 2008 in an attempt to save them from problems brought on by the global financial crisis.

In September last year, the Nationwide began its takeover process of both the Cheshire and the Derbyshire, then the Yorkshire made a move for the Barnsley building society, with the Skipton taking control of the Scarborough.

The most important factor when choosing to manage your personal finances effectively is time. A greater time investment will almost always result in a greater financial return.

Therefore the sooner you start to manage your finances, the greater return and financial ease you will feel in the future. Many people fail to plan ahead, which results in struggling to juggle finances at a later point in life.

Money management should focus on four primary questions:

1.       What financial goals would you like to achieve?

2.       When can you expect to achieve them?

3.       What finances do you currently have?

4.       What level of risk would you make to achieve these targets?

Choosing somewhere to live is an essential in everybody’s lives, and therefore, buying a house will be the biggest financial purchase that people will make. The financial investment into a home will affect all your other finances.

Making big decisions on your lifestyle will affect your financial goals. If you consider a luxury holiday to be one of life’s essentials, you will have less money left over for savings and investments.

When do you want to retire? What expenses do you currently have? Deciding what your priorities are will help to determine what money you will have left.

It is worth assessing your current liabilities, as these expenditures and assets could be reduced or sold and free up money for the future.

Calculate how much spare money you have so that you can form an investment plan. Investments can vary dramatically. Some are high risk for higher reward or loss, and some are low risk for a steady growth on investment. It’s up to the individual to decide what level of risk you are prepared to make.

Once these considerations have been made and your plan is in places, it’s important to assess the decisions you’ve made and how they affect you on a day to day basis. You plan may be too restrictive, leaving you with not enough money to live on, or perhaps you could make greater short term sacrifices to benefit you in the long term.

A small amount of time spent on your current finances can be highly rewarding for your future.

The US economy saw its first growth in over a year, rising to an annual rate of 3.5% between July and September.

Experts believe that a major spending plan by the US government which featured a scrappage scheme to encourage the car sales market has been the main cause of the upturn.

Some economists believe that there could be more setbacks lurking ahead, despite the official statistics showing that the recession is over.

A spokesman at the White House announced that recent economic progression was “a welcome milestone” but it would take more time for a full recovery to be recognised.

The US economy had risen 0.9% in relation to the previous three months, whereas the UK economy remained in recession, unexpectedly dropping 0.4%.

Hugh Pym, the chief economics correspondent for the BBC, revealed that the growth rate of 3.5% was greater than the 3.3% predicted by most experts.

He continued:”The sheer scale of the stimulus in the US has made a big difference, it was much bigger in percentage terms than that in the UK.”

“That the US, the powerhouse of the world economy is growing once again, is good news for the global economy has a whole.”

The last time the US economy grew was in the second quarter of 2008, by an annual rate of 2,4%.

The National Bureau of Economic Research will reveal the full extent of the US economic climb from recession when it analyses all the factors.

Some factors were significantly responsible for helping US economy during the third quarter, according to the Commerce Department.

The spending on durable manufactured products rocketed up at an annual rate of 22.3% which was the highest quarterly figure since 2001 and was spearheaded by the ‘Cash for Clunkers’ scheme helping new car sales.

Consumer spending increased on housing products by 23.4%, the greatest quarterly surge in 23 years, and came as a result of an improving housing market.

The big increase is considered by many to be due to the government’s $8,000 tax credit provided to first-time house buyers.

Government spending increased by 7.9% as stimulus spending spread and exports saw their biggest rise since 1996, rising by 21.4%.

Brian Bethune, an economist for HIS Global Insight stated that “it’s good to have the economy growing again.”

“But we don’t think that rate of growth is sustainable because it is distorted by all the government stimulus.”

“The challenge here is to get organic growth – growth that isn’t helped by fiscal steroids.”

However, unemployment is at a rate of 9.8% and a sharp fall came in September in the car sales industry as a result of the popular car scrappage scheme coming to an end in August.

Dean Baker, co-director of the Centre of Economic Policy Research believes that “you can say that the recession is over, but it sure won’t feel like that.”

“There is a lot of downward momentum that isn’t going to go.”

Plans to split British bank Northen Rock in two which would allow for its partial sale has been granted by the European Union.

The divide would result in two separate banks forming and are already being described as the “good” and “bad” banks.

The “good” bank would offer new lending, retain some of the existing mortgages and hold its savers’ money.

The “bad” bank would be used to repay the existing government loans and hold the remaining loans.

 Decisions made by the EU to accept the move are seen by Northern Rock as “an important and positive step.”

Changes to the existing setup will be made towards the end of the year.

The EU revealed that the good portion of the bank would be expected to grow and then be sold to third party, with the bad bank allowing its assets to dissolve then becoming liquidated.

The good bank may be sold prior to the general election next year with potential buyers being speculated already, with Virgin and National Australia Bank, owner of Clydesdale and Yorkshire Bank, among the interested parties.

EU Competition Commissioner, Neelie Kroes, believes that the move would make the bank a good long-term option, revealing that “this decision demonstrates once again that the EU’s state aid rules provide an appropriate framework to allow state support for a sustainable restructuring of banks without giving individual banks an unfair competitive advantage.”

Whilst Jonathan Todd, European Commission spokesman, said caps would need to be applied for the duration that the good bank remains owned by the public.

Some of the caps include a balance sheet reduced to a quarter of its size prior to the crisis, not being the market leader for loan interest rates, a cap set to limit its lending to one-third of Northern Rock’s 2008 levels and also a cap on retail deposits to be slightly lower than the pre-crisis level.

An investigation was engaged by the EU into Northern Rock in April 2008, two months after its nationalisation.

The results from the investigation showed that the UK government was kept at a “necessary minimum”.

By 30 June, the bank had paid back approximately half the taxpayers’ £26.9bn loan and will gain a further £8bn from the government during the end of year restructuring.

The EU stated that the restructuring would reduce its market share to below half of its pre-crisis level and “correct the excessive expansion of Northern Rock pre-crisis.”

Northern Rock released a statement, saying “this approval is an essential requirement of the planned legal and capital restructure, which is central to the business plan for Northern Rock.”

“The restructure will strengthen the capital and liquidity position of Northern Rock significantly, and offers value for money to taxpayers” and it would be “business as usual” for its customers.

Whilst the general financial atmosphere is improving and optimism growing, it is too soon to announce that we are in the process of recovery, according to experts at Ernst and Young Item Club.

The influential professional services firm expects some growth towards the end of 2009, but this growth should begin to struggle, with 1% expected growth for 2010.

They also predicted that customers repaying debt will grow slower than first anticipated and impending tax rises will follow the election.

BT Business research predicted a more optimistic outlook, declaring that small businesses are positive about the forthcoming year.

In September, BT Business conducted a survey of over 7000 small businesses and found that 75% believed their business would see an upturn in 2010, with 61% confident about their business’ prospects.

Professor Peter Spencer, Chief Economist from the Item Club, issued a wake-up-call to all those getting carried away with the optimism of recovery.

He warned, “there could still be substantial pain to come for corporates and consumers.”

“For a sustainable recovery the UK economy needs world trade to pick up and there is still not much sign of that happening.”

One of the factors holding back growth is that the VAT rate will return to 17.5% from its current level of 15% on 1 January, a change which may see consumers making purchases before the New Year.

Several other factors which will hold back growth lie on the horizon. An increase in national insurance contributions, the new 50p tax rate, the termination of the car scrappage scheme, tighter government spending and the return of stamp duty on housing are all due to hit the country.

Judging whether the recovery is happening, on the way or unlikely is difficult to forcast.

Professor Spencer went on to tell the BBC that the recent economic data has been “very mixed,” adding, “the stock market is absolutely rampant, industrial surveys all back in positive territory, but it’s yet to show through in hard data for output and things like that.”

“And when it comes to lagging indicators like unemployment, I’m afraid it’s going to be ‘feel bad’ for quite some time to come.”

On Friday, the official statistics for the Gross Domestic Product (GDP) are released, with many expecting no economic growth at all.

GDP is a measurement of the services and goods produced in a country, and since the first quarter of 2008, the UK GDP has been in negative figures.

The Bank of England has focused on quantitative easing, an act of pushing money into the economy. Professor Spencer feels that this has been of little success, with the little improvement on bank lending, going on to complain that “instead, the banks appear to have used much of the money to rebuild reserves and improve liquidity.”

Robin Hood

Banks are not ‘Robin Hood in reverse’ when it comes to overdraft charges, the House of Lords has been told as seven banks and one Building Society petition he Office of Fair Trading regarding the regulation of their overdraft fees.

Jonathan Sumption QC says that banks aren’t taxing the overdrawn to help others but that overdraft fees involve a large element of cross-subsidy.

The result of the appeal of the OFT will decide if millions of bank customers are able to reclaim their past bank charges back or not.

According to Mr Sumption, current consumer contract regulations, the OFT does not have the power to regulate overdraft fees, and that these fees are required, but shouldn’t necessarily be fair.

Overdraft Charges ‘Fundamental’

In previous court battles, judges have upheld that the OFT has the right to make its opinion heard on the fairness of banking charges under the 1999 Consumer Contract Regulations. But Mr Sumption says this is wrong, and that in both cases the problem had been over-refined and overcomplicated the interpretation of the Regulations.

He also points out that the Regulations were not designed to mediate price control or the services offered. And therefore they do not apply to the main subject matter of a contract or the price being charged for it.

He said: “The overdraft charges are too fundamental to the bargain to be declared unfair.”

According to Mr Sumption, people who exceed their overdraft and have to pay charges are paying back the cost of providing a current account to those who are always in the black. Therefore the charges exceed the cost of dealing with an overdrawn customer because “the revenue stream is essential to the whole of the current account structure.”

OFT Raising The Stakes

Apparently cross-subsidies are also common in the banking industries like France, Canada and the US., and that they are common in their charging structures. He also compares them to mobile phone tariffs and airline ticket prices which people do not object to.

One of the Law Lords assigned to the case asked if bank charges included a surcharge to subsidise those who did not go overdrawn. Another suggests overdrawn customers be taxed for the benefit of others.

Mr Sumption said that banks were not operating a Robin Hood-like operation in reverse, saying that if the OFT were to succeed it might render all past overdraft payments unenforceable possibly leading to “restitution.”

“The OFT has significantly raised the stakes. The issues are of considerable importance to consumers and the future of retail banking.”

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