Ways you can beat the banks at their own game

Unauthorised overdrafts.

A typical high street current account will clobber you for almost 30 per cent interest on unauthorised overdrafts, plus fees. Banks make an estimated £3bn a year from this. If you go overdrawn frequently, make sure your bank offers cheap agreed overdrafts and don't forget that clearing takes an unacceptable three days in the UK. So last-minute payments and transfers to shore up your balance (or lack of it) won't work.

Best buys for cheap overdrafts include Nationwide building society, Abbey, Alliance & Leicester and Yorkshire Bank for those who like branch-based banking. Anyone happy to bank online or by phone could also look at Citibank, Smile, If.com and First Direct.

Another way is to get an offset account, such as the One account from Virgin Money. This means you secure your current account against your home, which may not appeal to some people. But it does give the chance to take cheap borrowing (up to an agreed limit) without having to worry about overdrafts all the time. Good for people who get irregular salary payments and might otherwise get clobbered for charges.

Hole-in-the-wall machines

A nightmare that came, charged us £1.50 a time for getting our own money, and then went but has now returned.

Beware of any ATM that isn't sited on branch premises. It will charge you a fee (usually £1.50) to get your money. In rural areas the lack of a free cash machine is becoming a problem as banks close branches and Post Offices install fee-charging ATMs. The Campaign for Community Banking (www.communitybanking.org.uk) is a good place to find out more about this problem.

In urban areas, you will just have to walk a bit further to the nearest free cashpoint or get cashback at the supermarket.

This is a topical story and many interested groups are making a noise about it, especially because the charges hit the poor disproportionately. A ‘basic' bank account doesn't even have a debit card, so money can't be taken out for free at the supermarket checkout.

So little interest

Although many accounts run by big banks pay just 0.1 per cent interest on credit balances, it doesn't seem to bother the customers enough to make them move en masse to higher-paying accounts.

It's easy enough to move cash between accounts when you need to shift money to a higher-paying savings account. Best deals this week on moneyfacts.co.uk include plenty of accounts paying an annual earnings rate of 5 per cent or more.

For better interest on credit balances for current accounts, look to special offers from the big four (Lloyds TSB has one at the moment) or the newer banks and online offers including A&L and Cahoot (see table).

Even if your bank treats you badly, sells you duff investments, and gets your direct debits wrong, you are statistically unlikely to bother to switch. Because, in spite of all the changes designed to make switching smoother, it's still a hassle and mistakes happen. (In my own recent account switch, several direct debits didn't get moved with all parties are denying responsibility, while charging late fees for missed payments).

Plus, service is hard to assess, although friends' recommendations can help. Some people open a new current account (for example, a joint account with a partner to cover bills) in addition to their usual account as a ‘trial run'.

You may get slightly better service if you switch within your own bank to one of its ‘added value' accounts (ie the ones you have to pay for). If you are an affluent customer with one of the big banks you are probably bombarded with this type of offer. It might be worth a go if you can't face switching and think the extra benefits (usually better rates and sometimes dedicated call centre staff) will be worthwhile.

Try the Switchwithwhich.co.uk comparison tool, which builds in service and satisfaction ‘ratings' from Which? readers about their banks. Top marks on this go to Smile, with First Direct also highly recommended. Once the initial ‘settling in' period is over, many people never look back at their old bank. Except in anger.

Northern Ireland

Banks operating in the Northern Ireland are in a league of their own in terms of poor value and rip-off rates. However, there is hope on the horizon. The banks are the subject of a ‘super complaint' from Which? to the Office of Fair Trading owing to the differences in deals offered to customers in the more competitive ones offered to customers in the mainland banking market.

For example, it's common for NI customers to be charged fees and transaction charges even on agreed overdrafts if they go overdrawn, they'll be charged on all transactions for the rest of the quarter.