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A letter arrived from my bank. After a rather extended period of student and graduate banking covering my ordinary degree and Masters, they kindly informed me that my TIME WAS UP.
Not wanting to bother me with unnecessary paperwork, they told me that I didn't have to worry about a thing - they would simply change the status of my account from graduate to current. That £1800 pound overdraft could stay, but from the end of June 2001 I would be paying hideous amounts of interest and charges to use the account I had been using for free for the last four years.
Now I had grown weary of the usual shade of red attached to such a large overdraft, and fancied a change.
Being fashion conscious I looked for an online bank in a more flattering shade. According to the word on the street (my street and the gang of 4-6 year old girls who currently occupy it) Barbie pink is the only colour these days.
I decided that I would also love an interest bearing current account, as I was going to pay off the £1800 overdraft with a rather convenient and bacon-saving dividend payment from my partners company. Phew! Wonder what it will be like being in credit for the first time in six years??
My current (soon to be defunct) current account was with Barclays, and although I had used their online banking for as long as it has existed (not sure when it started), I did have a few niggles.
I found that there were a lot of improvements I would have liked - not least being that I always had to manually move the cursor along to the next box when entering sort codes for account details. I also find it exasperating that it takes them so long to come up with money in my account when it has been electronically transferred from another bank - it seems to take on average at least a week, which makes me wonder what they are doing with my money when it should have got there straight away.
My partner already banked with Smile, and when I learned of the attractive interest rate for Current account credit balances on Smile (now 3.04% gross), and that there was a fee free overdraft of £500 attached to each Smile Current Account (handy for those occasional lapses in budgeting), I was very interested.
Two other big plus points were that transfers between Smile accounts are instant, and that you can pay money in through your local Post Office. That meant that I could put my wages from my part time job into my partners Smile Savings account (interest rate 3.00% gross, increasing to 3.75% if you also have a Smile Current account) or one of my Smile accounts via the Post Office. All I had to do was fill in a deposit slip in his paying in book, hand over the book and the cash, and wait for the cash to be checked and the counterfoil and the deposit slip to be stamped.
Funnily enough I found that I could have been depositing over the Post Office counter to my original current account with Barclays! Unfortunately I have been taking the bus 5 miles into town for the last four years at £1 each way in order to deposit cash and cheques, because they have not made any attempt to let me know about this - another niggle!
Rather than waiting the three working days for cash deposits, or four working days for cheque deposits (made over the Post Office Counter in a special sealed envelope, or posted to Smile), I could get at my money later that night to pay my bills. This is because my partner would transfer it to me when he got in from work, and it would immediately appear in my Smile Current Account.
The reason I deposited cash into my partners account was that I was then waiting for my paying in book, cheque book and debit card to arrive. I also had a cheque to deposit, but this had to wait until my paying in book arrived, as you can only deposit cheques made payable to the same name as is on the deposit slip.
~~~~~~~~~~ How long did it take to set up the account? ~~~~~~~~~~
applied to Smile for a Current account and a Cash Mini ISA - whilst the application procedure is simple, and I didn't have to send off any ID because I already had a UK bank account, I found that there wasn't quite enough explanation of how to fill in the form (I was tired though).
a few minutes later received an email notifying me of a secure email at Smile.
used my enrolment number (make sure you write it down - my partner didn't and it was difficult for him to access his secure messages) to log in to read my secure message, which informed me that my accounts would be opened, and that a few more checks needed to be done before the accounts would be open.
another two secure messages. These informed me that my Current account and Cash Mini ISA were open, and that I had passed the checks. I had expected to be turned down for the current account, because the terms and conditions of Smile Current accounts state that you must have £1000 per month going into your account to qualify, and I have nowhere near that going in - I put my annual income down as £4000! The messages told me my account numbers and sort codes, and that I would be able to log in to my accounts in two days. It also stated that I would receive the necessary paperwork and cards for my account within two weeks, which included:
1. a Visa debit/Electron card (whichever one I chose - can't remember which but was probably the Visa), 2. pre-paid and post office deposit envelopes for paying money in, (took 6 days) 3. a chequebook and paying in slips, (Cash Mini ISA deposit slips arrived 7 days after account application) 4. a salary mandate to request that my wages would be paid straight in to my new account, (took 6 days) and 5. a standing order mandate, for paying in money regularly (took 6 days).
I managed to log in to my accounts. This is longer than the two days specified, but bear in mind that I applied late on Friday night just before the May bank holiday weekend. In that case it did take two working days for me to log in to my account.
I made my first transfers into my Smile accounts to see if they worked - £1 to the current account and £1 to the Cash Mini ISA. I cocked up slightly because I had written my sort code for my Cash Mini ISA down wrong - each type of account seems to have a different digit at the end of the sort code - 86 for current, 88 for savings, and 82 for the Cash Mini ISA. I transferred another pound over to the Cash Mini ISA to make sure that something went in, and will update if and when the other pound turns up somewhere.
persuaded my partner to transfer a tenner from his account to mine, having realised that the Barclays transfer probably won't make it over for at least four working days (ETA - 06/05/01). The tenner did not appear straight away - I was logged in on another browser window when he did it - so my partner suggested that he had found if you logged out and logged back in again it should have appeared. He was right (curses! - well he says he is always right).
transferred a pound into my Cash Mini ISA to marvel at the speed - and it was there! I then decided to open a Savings account, so that I can shuttle money back and forth between accounts without worrying about my ISA limit of £3000 maximum to be deposited during the course of a year. With the current account, I will get a higher rate of interest on my Savings account - 3.75% rather than the standard 3.00%. My only niggle here is that I had to fill in al the details again - despite having filled in details of address and the five different security items a few days before for the other accounts.
got the standard secure message about my Savings account.
printed off the Smile User guides for each account from their site.
successfully deposited some cash into my partners Smile Savings account - he will transfer it tonight and I can pay some bills straight away - very handy for exchanging money between partners or friends quickly!
received my paying in envelopes (both to post directly to Smile, and to deposit over the counter at the Post Office) for the Current and the Cash Mini ISA accounts, the Inland Revenue form for receiving interest without paying tax for my current account (will have to calculate if I am above or below the threshold at the moment - think it is just below), and a declaration to keep on the Smile Cash Mini ISA, which I need to keep - this states my personal details and the rules of the Cash Mini ISA.
ordered envelopes - for deposits at the Post Office, and for deposits to Smile by post.
received my book of deposit slips for the Cash Mini ISA. received a secure message notifying me that my savings account was open. received a secure message confirming that my request for envelopes was being dealt with. paid my first bill successfully from my Current account. transferred £1 from the Current account to the Savings account - it worked.
~~~~~~~~~~ So how does Smile compare with my previous online bank? ~~~~~~~~~~
Writing this a year and a half on, so far it is much better.
It was very easy to apply online for the accounts.
The secure messaging facility is great - overall I am very impressed with the security of this bank - the only one in he world to have a British Standards kitemark - as they trumpet all over the site.
I like the fact that your log in and transactions take place in a secure Java applet.
The navigation is logical, and it is easy to keep track of my money, as all the accounts are displayed on the balance page, with a "net worth" figure.
The overall feel of the site is friendly and very customer orientated - it remains to be seen whether this is true, but I always felt like just a number with Barclays.
I love the savings calculator (find it under "diy" on the top menu bar), and found that I would be able to save £1,000,000 in 36 years and 2 months if I saved £1000 a month. If I am realistic that is not going to be possible, so I will extrapolate that my £10 a month will need to go in to my saving account for the next 3,600 years to make my million, as if your savings term is over 50 years they do not calculate it for you. By then a pound will probably buy me 1 percent of a gob stopper - or will it be Euros....
I have also changed my employment - instead of working part-time locally, I work for myself selling on Ebay - surprisingly successfully.
Smile has been great for this as I can deposit my many cheques a week in my local Post Office with no problems.
The only fly in the ointment is that they will only send out 5 Post Office deposit envelopes at a time, although this is easily remedied by emailing customer service through the secure messaging service and requesting 25 at a time.
I have found the customer service great, with a quick response every time, and altogether I am very pleased with Smile as a bank.