Wealth

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The high street alternatives to the ‘Big 5′

Are you angry enough over the numerous recent banking scandals to want to switch your high street bank? Bank customers have been voting with their wallets over the past week, after the NatWest computer meltdown and the Barclays rate-rigging scandal

But what are the alternatives? We last looked at ethical banks. In this post we take a look at ‘ordinary’ high street alternatives

Handelsbanken

The bank is the biggest in Sweden and the third biggest bank in the Nordic area. It was established in 1871 and according to the bank, it has one of the highest credit ratings and lowest funding costs of any European bank

It has 750 branches in 22 countries

There are a surprising 128 branches in Britain, the first of which was opened in 1988 in London to serve its Scandinavian customer base in Britain. It has rapidly expanded in the last decade as its customer base grows – 27 new branches have been announced in the last 12 months

Handelsbanken has a ‘traditional’ model, which, sadly, now classifies as ‘unique’ in the UK. This means that customers have a more active ‘hands-on’ relationship with their branch manager

Each Handelsbanken branch is run like a small business. Typically, the branch manager will be local to that town, and they will recruit their team of experienced bankers from within the community – this means they know the demographic

Products such as a current accounts, savings rates, mortgage rates and loan rates are set on an individual basis –  it doesn’t advertise rates in branch or online, but tailors them to a customer’s individual circumstances. This means that some of its customers are charged for current accounts and some aren’t

It has no call centres but, gasp, customers can ring the branch and speak to someone who knows them,  with online banking also available

Metro Bank

The first new High Street banking name to open in Britain for over 100 years, the bank launched two years ago to much fanfare and promised an all-round better banking experience for customers, especially in branch

It has 12 branches (Metro call them ‘stores) located within or around the M25 area. It is set to have 20 branches by the end of 2012, while it has ambitiously targeted opening 200 by 2020

Stores open 361 days, 8am-8pm in the week, 8am-6pm Saturdays and 10am-5pm on Sundays and Bank Holidays. The UK call centre is open the same hours, closed only Christmas Day, Good Friday, Easter Sunday and New Year’s Day

Its current account is free and also offers free currency transactions abroad

It offers online and telephone banking, but in terms of branch-based action, you’ll need to be in or around the London area – for the time being

If you decide to open an account, a special gizmo will produce your debit and credit cards on the spot. Both cards boast the valuable feature that they don’t charge you extra to use them abroad anywhere in the world. And while the rates on savings won’t attract many, the interest rates charged on its personal loans and credit cards are competitive

The bank also offers a range of loans, mortgages and savings, some of which are competitive against deals from the big High Street names

Secure Trust Bank

Secure Trust Bank was founded 60 years ago in the Midlands and made its name providing families with accounts to help them to budget

The bank has no branches of its own, so customers have traditionally used Post Offices, designated retailers, or Barclays, with whom Secure Trust has a formal arrangement

Unlike most High Street lenders, the cautiously-run Secure Trust doesn’t rely on funding from the international financial markets and lends its customers less than it takes in through deposits, making it an extremely safe institution

Its current account is a basic bank account that is open to everyone over 18, regardless of credit history

The account comes with a £12.50 setting up fee and a monthly management fee of £12.50. It also charges 50p per transaction and the account comes with a MasterCard Prepaid Card

This means you have to ‘load’ money onto your card before you spend. The idea being that you cannot overspend, ideal for those that may have had financial problems in the past, although they may not fancy the 50p transaction charge

It also enrolls you into its reward scheme, which offers up to four per cent rewards from over 35 High Street retailers, including Argos, Boots, B&Q, Comet and Debenhams

Virgin Money

The newest new bank, Virgin, bought Northern Rock from the Government and its 75 branches and four million savings and mortgage customers are now part of Virgin Money. Northern Rock sites will be rebranded by September and they too will be called ‘stores’ rather than branches

Virgin Money will launch its current account next year and claims that it will be fully transparent, with either a monthly account charge or explicit charges for all transactions. No details of prices have been published but some current accounts will always be free. As with its credit card, some may come with deals on other Virgin products such as wine or flights

A new Virgin Money savings account perhaps shows the way it is thinking. It offers a straight 2.85% on any amount with no introductory bonus. So the rate won’t plummet after a few months. The same rate is available online, by phone or in a branch. With only 75 branches Virgin will be a tiny player on the high street. But it has promised to ‘disrupt the banking industry’. Perhaps it will!

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