Some banks offer cheaper services but clients often prefer the old reliable, writes Laura Slattery.

Switching to a new bank will be a fiddly, time-consuming process if you have a lot of current account direct debits and standing orders.

You need a very strong motive and a willingness to wait on hold.

About eight out of 10 people have their current account at either AIB or Bank of Ireland.

Yet a person who makes just 10 ATM withdrawals and five Laser transactions every month and pays an average of five monthly bills by direct debit could save an annual sum of €66 if they are an AIB customer and €67.20 if they are a Bank of Ireland customer by moving to a bank that offers free transaction banking.

Unlike the "big two" banks, National Irish Bank (NIB), Permanent TSB and Ulster Bank all offer free banking to more than just students and pensioners.

NIB's Freebank Current Account and Ulster Bank's Current Account remain free for transactions and charge no quarterly maintenance fees as long as accounts are in credit.

At Permanent TSB, mortgage customers and people who hold a balance of €1,000 or more in their Loyalty Current Accounts are not charged maintenance or transaction fees.

Last year, the year in which AIB removed free banking for customers whose credit balances exceeded €500, Permanent TSB trebled its number of "quality" current accounts - accounts where salaries are mandated to be lodged electronically.

NIB has also reported a surge in online and branch inquiries about its Freebank account.

But why isn't everyone moving?

If vast numbers of AIB and Bank of Ireland customers were to desert their old, comfortable banking homes for the smaller players, the chances are those two financial institutions would offer customers more competitive - that is cheaper - services.

Anecdotal evidence suggests that when people do try to move to free banking, their existing bank sometimes competes for the business, offering incentives such as bundles of free transactions to stay.

But most of the population sticks with what they know either because they are reassured by the thought that they are paying for enhanced customer service standards or because they feel that the annual savings on offer are, in fact, to be sniffed at.

The switching process itself also inevitably costs money upfront, effectively wiping out our typical customer's €66-€66.70 saving on fees for the first year.

Being hit twice for Government taxes "can be a deterrent for people", according to a spokeswoman for NIB.

The stamp duty on ATM cards and laser cards is €10. Cards with a combined ATM/Laser function attract a duty of €20. A consumer with such a card who switches banks will thus be charged a total of €40 for the year in which he or she moves.

But the main cost of switching revolves around those pesky, balance-destroying direct debits.

Free transaction banking services may charge fees for setting up direct debits and standing orders.

Ulster Bank charges €3.17 for setting up a direct debit and €3.81 for setting up a standing order, while Permanent TSB charges €5 for both. So for customers with five direct debits, switching accounts could cost €15.85-€25.

That's if they ever get that far.

The process of transferring direct debits and standing orders from one bank to another is laborious to the point that current account portability is currently under investigation by consumer watchdogs.

The Competition Authority is also expected to examine the issue in its continuing study of the banking sector.

Under the present system, when people change banks they must complete and sign a new agreement form with each originating company, for example ESB, Bord Gáis, Eircom and NTL, that should send the altered mandates onto the new bank.

For customers with more than a handful of direct debits, this can get confusing.

And as the new bank will have to wait for the direct debit originator to forward the new mandates to them before it can set up the direct debit again, any delays can result in missed payments.

If customers plan for a period of overlap when both accounts remain open while they switch, hiccups such as double payments can occur.

These hitches and hold-ups have effectively been eradicated in Britain, where consumer campaigns led to the introduction of an automated system for transferring direct debits over two years ago.

Under the system, the new bank manages the transfer once customers give them details of the old account and signs a single authorisation form so it can act on their behalf.

The new bank contacts the old bank to obtain details of all direct debits and standing orders held against the account.

By law, the old bank must give the new bank a list of all debit agreements within five working days.

The new bank then gives the originating companies the new account details and advises the old bank of which direct debits it needs to cancel.

Some banks even give customers an interest-free overdraft during the switch.

Here, the Irish Financial Services Regulatory Authority (IFSRA) will produce a code of practice on account switching later this year.

A consultation document should be issued soon.

The code will also apply to deposit and mortgage accounts, a spokesman for the financial regulator confirmed.

At the launch of its survey on current account charges, the financial regulator signalled its concern about the number of calls to its consumer helpline relating to current accounts.

"We do believe consumers have had difficulty in switching. It's not made easy for people," said Ms Mary O'Dea, IFSRA's consumer director.

The code is expected to follow the British example by setting a fixed number of working days in which the old bank must assist the new bank.

Such a code "would be of significant benefit to us", according to a spokesman for Permanent TSB.

The bank has already introduced a "Switcher" pack in an attempt to facilitate disgruntled AIB customers.

Bank of Ireland has also produced a switch pack, which it says contains all the information customers need for a "trouble-free transfer" - to the bank rather than away from it.

The pack includes contact details for some of the main direct debit originators, a "moving your bank account" checklist and sample letters.

But both banks still require that customers cancel all direct debits and standing orders themselves.

Without any consumer legislation in place, there are no guarantees that moving current accounts will not end up being a protracted and stressful experience, vulnerable to human errors and third-party delays.

What to ask about current accounts

According to the Irish Financial Services Regulatory Authority (IFSRA), customers choosing a current account need to ask about:

The fees and charges - you should be provided with a full list. Look particularly at the cost of the services you expect to use the most;

The ways you can reduce charges - for instance by keeping a minimum balance in the account or earning interest on credit balances;

The services provided - telephone banking, internet, branch facilities, ATM machines, monthly statements, etcetera;

The cards provided - e.g. cheque guarantee, Laser, ATM - and whether they are combined or separate;

How often they will receive a statement;

The interest rate on overdrafts and any related fees? Again, you must be provided with a list.

A current account is a place to keep money that will be needed in the short term, the IFSRA stresses.

The regulator advises consumers not to keep too much money in a current account, earning little or no interest.

The IFSRA also encourages consumers to complain if they are not happy with the service they receive and to shop around from time to time to check alternative accounts for better returns or cheaper facilities.

The regulator's cost survey on personal current account charges will be updated every six months.

For more information see the regulator's website, www.ifsra.ie, or lo-call the consumer helpline on 1890 777 777.