Switching has become a far easier process. It means you can pick a bank that will pay better rates of interest and top service. Follow our step-by-step guide:
Banks and building societies must follow strict guidelines that make switching your bank account as quick as possible. Your old bank has three working days to pass information to your new bank. This includes details of all your direct debits and standing orders along with your credit history.
Your new bank has 10 working days to open an account for you once your application has been approved.
The history
Previously, switching was delayed by direct debit/standing order originators (gas and electricity companies, credit card companies etc) dragging their heels in passing on information. But they have improved and the average time it takes to transfer an account now is about eight weeks.
Advice and tips
This is Money is packed with advice on switching bank accounts and finding the best deals. See our special Saving & banking section.
How to do it
Most people switch accounts to earn more interest. Better service comes a close second. While inertia is still a massive hurdle, moving accounts can prove worthwhile and it shouldn't take you longer than 10 minutes to fill in the relevant forms.
Generally you go to your new bank and ask to switch accounts telling them the name of your old bank and providing your account details. You'll have to provide two forms of identification - one to prove you are who you say you are, the other to prove where you live.
At most banks you need to fill in two forms - an application form and a transfer form. After that the entire switch is automated by the bank.
Check that your new bank will offer an interest-free 'switcher' overdraft which covers direct debits and standing orders that go through before money is paid into the new account.
Picking a new bank
Always shop around for the best rates of interest. Plus look out for high charges on overdrafts and other services.
Some accounts throw in extra freebies, such as breakdown cover on your car or free travel insurance. There may be a catch on these, such as a monthly charge or you must pay in a minimum amount each month. Check the small print.
Seven million families have been put on fraud alert after it emerged that Government workers had lost computer discs containing the names and bank account details of 25m child benefit recipients.
For anyone already thinking about switching bank accounts to get a better deal, this could be the final push to do it.
More than 60% of bank users still manage their money with one of the Big Four - Barclays, HSBC, Lloyds TSB or NatWest/Royal Bank of Scotland. This is despite the fact that these players typically offer derisory interest on balances and often provide a poor level of customer service.
Customers stick with these giants despite growing competition from rivals such as Alliance & Leicester; Smile, the online bank owned by Co-operative Bank; First Direct, owned by HSBC; and Cahoot, part of Abbey.
For many customers, switching a current account is seen as a nuisance where the benefits - a few pounds more per year in interest - do not outweigh the effort. There is also a worry that the process could go wrong, with direct debits and standing orders going astray.
But there is a slow, steady change in sentiment. Interest rates on some current accounts exceed those from best-buy savings accounts, while many customers are less tolerant of shoddy service. One-third of bank customers have already switched their account once, according to analysis by research company Mintel.
Martyn Hocking, editor of Which? Money magazine, says: 'In our most recent annual current account survey last August, 61% of people said they banked with the Big Four. This is down from 68% in 2000 so things are changing - albeit slowly.
'We've seen banks cutting rates and changing terms on accounts to the detriment of customers, which often prompts them to switch.
'People are also increasingly aware of their rights and are not prepared to stomach poor service. The bad publicity for banks surrounding onerous overdraft charges has also caused more customers to switch.'
Finding the top rates
Bank customers who rarely go overdrawn should search out accounts with high rates on credit balances. Rates vary greatly, but the worst are typically those offered by the big banks - paying a miserly 0.1%.
The best accounts for switchers include Alliance & Leicester, paying 6.5% on its Premier Direct current account; Coventry Building Society, offering 6.35%; and Abbey, paying 8%.
All rates are before tax, but these accounts have restrictions, such as minimum monthly payments into them. And in the case of Abbey and A&L, they pay the top rate only on balances up to £2,500. Coventry pays the top rate on balances up to £250,000.
And these attractive rates are available for only one year. At A&L, in January 2009, the rate drops to one percentage point below the base rate - making it 4.5% at the moment. Abbey's rate drops to 2.5% and after 12 months Coventry's to 5.5%.
'Many people won't want the hassle of having to switch accounts again in a year's time so they should look beyond the headline rate,' says Esther James at independent data compiler Moneyfacts. 'A solid long-term rate is usually preferable as most people stay with their bank for a long time.'
Halifax offers 6.17% on its High Interest current account on balances up to £2,500. Norwich and Peterborough Building Society pays 4.85% on its Gold current account for balances up to £5,000, while Nationwide's FlexAcount gives 4.25% on up to £3,000. There is no time limit on these rates, but they could easily fall.
Peter Cheesley, 37, a marketing manager from Cambridge, moved his account from Barclays to Abbey a month ago to take advantage of its 8% rate. He also began working for Abbey a few weeks ago as a marketing manager.
Peter, who lives with his partner Belinda Cheswick, 32, a communications manager for a charity, keeps a typical account balance of £2,000.
'I was sick of earning next to nothing in interest on my current account,' says Peter.
'I don't want to have to switch cash into a savings account monthly because I need daily access to it. But at the same time I thought my money could be working a bit harder for me.'
In search of an overdraft
Customers who need an overdraft should look at Alliance & Leicester Premier, which offers interest-free overdraft borrowing for one year, followed by a fixed £5 a month fee on overdrafts up to £1,000. Halifax's Moneyback account charges 6.9% on overdrafts for account switchers while Norwich and Peterborough charges 7.74%, with a 0% offer for six months for new customers.
Looking for good service
Poor service is still the main reason why consumers switch bank, says Which? Money, whose latest current account report gave 40% of all bank accounts only two out of five for customer satisfaction.
'Time and again consumers tell us that it is service, above all else, that they look for,' says Hocking. 'Bad service is still the most likely reason for a customer to switch.'
The Big Four banks scored lowest in the Which? survey for customer satisfaction, along with Abbey and Clydesdale Bank. Among the best for service were Cahoot, Smile and First Direct.
First Direct prides itself on its friendly and efficient customer service and the fact that its UK-based call centres are available 24 hours a day. The bank scored five stars in the survey for online and phone banking customer satisfaction and four stars overall.
First Direct's supporters include Martin Hare, 34, from Leeds, who switched from NatWest.
Martin, a self-employed IT consultant who lives with his partner Rahela Miah, 34, a civil servant, says he is impressed with First Direct, even though it does not offer the best interest rates.
'I had awful problems with NatWest,' he says. 'Often when you called about a problem it never got sorted out. This has never happened with First Direct. There is always someone at the end of the phone. As a self-employed worker paid by the hour, my time is precious.'
An innovative account
Some current accounts offer special benefits. NatWest's One Account is a current account and mortgage rolled into one.
Your current account balance and any savings can be offset against your mortgage debt in one account so you pay interest only on the balance. The debt interest is high at 6.7%, but the key benefit is the flexibility to pay off chunks of the home loan or borrow more.
Extra cash left in your account goes towards cutting the mortgage debt, reducing your interest bill and helping clear the mortgage early. Intelligent Finance, Cheltenham & Gloucester and First Direct offer similar offsetting facilities.
Packages of perks
There are plenty of 'packaged' current accounts that offer add-ons such as travel insurance and breakdown cover. Most carry steep fees that can total £150 a year. Some perks can prove valuable, but those interested in such an account must do their sums before signing up.
Other accounts from Alliance & Leicester, Norwich and Peterborough, Halifax, HSBC and First Direct offer exclusive savings deals for current account customers.
HSBC pays 10% fixed on its one-year regular saver account for Premier, BankAccountPlus and Passport account users. Monthly payments of between £25 and £250 must be made for one year. A&L pays 12% on its regular saver account for Premier Account customers. Monthly payments must be between £10 and £250. Smile pays a bonus of 0.75% on its cash Isa rate of 4.75%.
Elizabeth Griffiths, 47, a commercial finance programmer for a large insurer, switched from Abbey to Norwich and Peterborough in July, opening a Gold current account that can be operated in branches, over the phone and online.
She switched to the mutual because she hopes the service will be better than Abbey's. Elizabeth was also attracted by its regular savings account, which pays 8% gross and is exclusive to current account customers.
Elizabeth, of Great Ellingham, Norfolk, pays £200 a month into the account. Savers must deposit between £20 and £250 monthly for 12 months. No withdrawals are allowed and the 8% rate lasts for a year.
'The savings deal attracted me to the bank account,' she says. 'Even after the deal has finished, I'll be getting a good return on my current account, which pays 4.85%.'
Four weeks to make your money work harder.
Switching a bank account is simple - but timing matters. Choose the date you want to switch, allowing at least four weeks for the process.
This is Money can help you find the best account through our savings tables. Select the bank you want to switch to and apply either online, by phone or in the branch. Then contact your present bank and let it know you plan to move your account.
Your bank must send all details of your direct debits and standing orders to your nominated bank within three days. Your new bank will arrange for the transfer of these details, though you may want to see a list of the direct debits and standing orders to check they are correct and nothing is missing.
Give your new account details to your employer or pension provider and anyone else who pays money into your account.
If you have any problems with the switch, complain to the bank first, taking the case to the Financial Ombudsman Service thereafter if necessary.