I have my savings, current account, cash Isa and credit card with a single financial provider – a Which? recommended provider, naturally. But are we missing out on better deals by sticking our eggs in one basket?
Working at Which? Money, I have an impressive egg collection – metaphorical, financial eggs, that is.
But I keep them together in one big basket, with my current account, cash Isa, credit card and savings account all with the same financial provider.
Possibly enough to get me fired from Which? in normal circumstances, but my bank is a Which? Recommended Provider in each category, so I should get away with it. The products are competitive too.
And yet, a new entrant to our Best Rate savings tables this week made me wonder how many people have all their products with one provider out of habit or brand loyalty, even when they know they’re not suitable or competitive?
Egg-citing new deals…
Vanquis Bank now offers one- and two-year fixed-term savings deals that feature in our Best Rate tables, paying 3.2% and 3.85% respectively. The bank is authorised by the Financial Services Authority (FSA) and fully covered by the UK Financial Services Compensation Scheme (FSCS) in case anything goes wrong. No problems there then.
At the opposite end of the scale, Vanquis’ other main product is a credit card aimed at people with a poor credit history that charges an APR of 39.9%. The card is therefore unsuitable for most consumers.
There’s nothing wrong with a bank offering high-cost credit at the same time as competitive savings accounts, but something is going wrong if you’ve got both. If you do, it’s probably time to use your savings to pay off your debt.
Enough to make you switch?
This may be an extreme example, but what about the thousands of consumers who stick with the same bank’s mediocre products just because they’ve banked there for years? I’m happy to keep all my eggs in one basket if I like the provider and it offers competitive products, but I’d be off like a shot if either factor changed.
What would make you switch? And conversely, are there any banks you’d be happy to borrow from, but reluctant to save with (or vice versa)?
If I told you that Vanquis is owned by doorstep lender Provident Financial would that change your view? My brain tells me it doesn’t matter, my heart is undecided.