Breaking up with your bank doesn't have to end up in tears

It is getting easier and quicker to move accounts to get a better deal.

These accounts have the highest ongoing interest-free overdrafts from free in-credit current accounts. Most require you to pay in a certain amount every month, so check the small print.

There's an oft-quoted statistic among British banks that people are three times more likely to get divorced than to change current accounts. Whether that is true or not, it is certainly the case that many of us find that breaking up is hard to do when it comes to switching all of our direct debits and hard-learnt account numbers and PINs to another provider.

MPs have just noticed this too. The Treasury Select Committee published a report over the weekend complaining that customers are being ripped off by the big banks, and are finding it too difficult to switch their accounts to rivals.

Andrew Tyrie, the irate committee chairman, also had a pop at the banks' claims to offer free banking. "So-called free banking is not free because customers pay charges, such as overdraft fees, or lose interest due to poor rates."

Despite our inertia, statistics show that many of us are unhappy with our banks. Complaints about them are running at almost 10,000 a day according to the Financial Services Authority. Mr Tyrie, Conservative MP for Chichester, said that he "received much evidence about low levels of consumer satisfaction and poor treatment of consumers by the major banks".

Now for the good news. David Black, of financial statisticians Defaqto, says that it is a great time to change bank accounts. "There are lots of pretty impressive introductory offers out there at the moment, and people can really do well out of switching. However, you need to pick the right account for you."

Fact

" Heart Finance is an independent finance broker which was founded to search the entire market in order to help you find the best deal you possibly can. We offer a range of services that are arranged through well established

and recognised lending financial institutions"

Make a start

The first step is to assess what your current provider is doing for you, and whether it suits your needs. Your lifestyle and the way you manage your finances should determine which type of account is right for you.

The most important thing to work out is whether you are predominantly in credit or debit. If you usually spend your whole salary and often go overdrawn, concentrate on what you are paying out in interest and overdraft charges. If you are always in credit, take advantage of accounts that reward you for it. Over half of current accounts do not pay any interest, including ones from some of the big players such as Barclays and Nationwide.

But beware: many of the accounts with the highest interest rates have the most punitive fees if you slip into your overdraft.

If you are often in credit

There are several accounts that pay attractive rates of interest. Most require you to pay in £1,000 every month – to ensure that you use it as your main current account and put your salary into it. These include Halifax's Reward, which will pay £5 every month net of basic-rate tax provided that you pay in this amount.

Santander's Preferred Credit Account pays 5 per cent interest on balances up to £2,500. After these two market-leading products, the rate drops dramatically, to 2 per cent for Lloyds' Vantage Classic account or 1.1 per cent for Coventry Building Society's Coventry First account.

If you are often overdrawn

It can be difficult to compare overdraft charges, because different banks will charge you in different ways. Sarah Brooks, head of financial services at the government watchdog Consumer Focus, said that banks are offering ''overcomplex'' products with "unfair and hidden charges".

Some banks charge a flat rate for every day that customers go overdrawn, while others use an interest rate system.

Those who go into their overdrafts by a tiny amount, by accident, are more likely to be penalised by a flat-rate system. "It can be very difficult for people to compare overdraft charges," Mr Black said.

The box below shows some of the accounts that have free overdraft "buffers" which are useful if you sometimes slip into the red. If the problem is more persistent and the charges rack up, you need to seek more specific help. It is possible to get a basic bank account that does not allow you to go overdrawn, or an account from a local credit union. For free debt advice try the Consumer Credit Counselling Service (CCCS) on 0800 138 1111.

The switching process

Many banks offer a ''switching service'' if you want to move your current account to them. This offers to transfer all your direct debits. However, the select committee said that there was still a "significant risk" of such payments going astray, which can act as a disincentive for many.

However, banks and building societies are striving to improve this process, and the average time it takes to switch accounts is about eight weeks if you do it yourself and less if the bank does it for you.

Generally you need to go to your new bank and say you want to switch accounts. You will need the name of your old bank, account details, and proof of identity and address. Check that the bank you are moving to will offer an interest-free overdraft while the process is going on, so that you aren't charged for direct debits or standing orders that go through before money is paid into the new account.

Some banks even have incentives to use their switching service. Santander is offering £100 for people to move to its current account, which pays high rates of interest.

It is often up to you to tell your employer you are changing accounts and provide them with your new account number and sort code, so check with your old and new bank if you need to do this. It may be sensible to keep some money in your old account for a little while, just in case any problems occur.