Great Concept, but Would You Switch

LloydsTSB's save the change is one of the newest ways banks in the UK are trying desperately to get each others customers to switch to them. Personally, I see no reason to switch banks unless you get very bad service from them or they can not or will not do something to improve the way you bank. I've been with my bank for 24 years and really can't see myself switching. The first sort of switch offers I seriously looked at were the high current account interest options, with slogans aimed at making you question why you were with your banks "pitiful" interest on positive balances in a current account, when they offered you up to 60 times more interest. Well whoopee-do, because most of my account money is gone pretty soon as it reaches the account. It goes to pay bills and to my regular savings accounts. Once bills are paid and savings are made the money is mine. I'm not worried about spending my savings nor saving what I spend, that's all done.

I imagine that whilst I'm not alone sufficient people must keep an account balance that warrants such interest. I can't see why this isn't just in a savings account, but there must be reasons for it. Probably laziness, or persons that are well-off enough to have a significant amounts in a current account and not worry about investing it elsewhere. Surely, laziness is the sucker punch to stop the lazy from changing bank account and the well-off probably don't care either. However, what do I know.

Anyway, back to LloydsTSB; they have just had this great idea, why not round up all debit card transactions and save the difference. They'll do this automatically for you so all you have to do is spend, spend, spend. I actually think this is a fantastic idea, a simple thing that means a) all transactions are in whole pounds, which is great for a budget and b) you save money you don't notice. The trouble is this is not worth switching banks for. I did some calculations and on my debit card transactions I could save around £2 per week, if I expanded this to all transactions I can save £5 per week. So on average this makes me £20 a month better off and approximately £240 a year richer.

Is £240 a year worth the hassle? For a lower income family, that may find it hard to save this sounds like a great idea. I wonder if they would save as much as me though as I make a lot of transactions a month. It's not the amount you spend, but the relative number of transactions and the difference in transactions rounded up that matters. This means it could be a similar saving for a lower income family, but remember I had to include all transactions, not just debit card transactions to reach this figure. The total debit card savings is actually only £84 per year. This is potentially significant, perhaps as much part of a Christmas savings pot, but is it worth a switch? I don't think so, but then that's me, I'll only make a change for a very good reason.

In the meantime, I've started calculating the difference of all transactions in one month and saving that total difference in the next months budget. £240 will do me nicely, without any hassle of changing banks. The moral of this story, steal other people's good ideas, but don't inconvenience yourself.

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