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Sundaytimes

You need to break up to make money

 

Many consumers are stuck in unrewarding relationships with banks and suppliers. Why not switch, asks Niall Brady.

Savings
Banks lure new customers with eye-catching headline rates, especially for monthly savings accounts, but these can disapear quickly.

Aib slashed the rate on its Parent Saver account from 5% to 3% last weekend, even though the European Central Bank is expected to leave interest rates unchanged till next year

Bank of Ireland followed on Tuesday - cutting interest on its DualSaver account from 4% to 3.5%.

Interest banks pay slightly less than the state-backed Irish insititutions, although their rates are usually more consistent with fewer terms and conditions. Nationwide UK (Ireland) pays 3.3%, Northern Rock pays 2.5% and RaboDirect pays 2%.

Simon Moynihan of bonkers.ie, a price comparison website, said:"Banks do not alert existing customers to new high-rate accounts because it doesn't make sense to pay a better rate to those who haven't indictated that they want it. The result is many people earn 0.01% interest for demand deposits - €1 a year on savings of €10,000."

Energy
Electricity and gas suppliers offer attractive discounts on the tariffs of ESB and Bord Gais, but these can expire in a few months. Flogas will guarantee its discount of up to 9% on Bord Gais prices only until the end of September, although it promises to keep undercutting the state gas company after that.

Thousands of householders who switched from ESB to Bord Gais last year are seeing their electricity discounts drop from a maximum of 14% to 10%, up from 5%.

Moynihan said they should now move to Airtricity's "dual fuel" offer, which will restore the electricity discount to a maximum of 13%, as well as offering a discount of up to 10% on gas.

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