Natwest and RBS customers: should you stay or go?

If you are a NatWest or Royal Bank of Scotland (RBS) customer you might not be for much longer. The state-backed banks have been forced to sell branches to Santander to satisfy European competition rules. Anyone who opened a current account, savings account or took out a mortgage at any of the 311 RBS branches in England and Wales, or the seven NatWest branches in Scotland, will automatically become Santander customers over the next year.

"No RBS or NatWest customers will be worse off as a result of the transfer," says a Santander spokesman on Thisismoney.co.uk. But they won't confirm what interest rates transferred customers borrowers nor savers will get. Luckily, you don't have to be a passive bystander. Under the terms of the deal NatWest and RBS aren't allowed to encourage customers to stay, but you can call 0800-210 0214 and request a form to fill in so you can stay with them. But before you do so, consider whether you are getting the best deal.

RBS's current account doesn't pay any interest if you are in credit. Conversely, drop into the red and you'll face an overdraft rate of 18.28%. There are some far better current accounts out there. The best on offer are, in fact, provided by Santander you can choose to either have a current account with an interest-free overdraft for the first year or one that pays 5% on balances up to £2,500.

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However, the bank hasn't clarified yet whether transferred customers will be eligible for these introductory offers. So switch now and guarantee yourself the better deal. As for savings accounts and mortgages, whether you switch or not depends on how good your current rate is, but it's definitely worth shopping around whatever rate Santander offers its new customers, they are unlikely to be the best available, given that the bank will get most people's custom regardless due to inertia.